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Wednesday, 04 March 15
KEEP CALM AND INVEST IN DRY - THEODORE NTALAKOS
 Keep Calm and Carry On was originally a motivational poster, intended to raise the morale of the British public, produced by the British government in 1939 in preparation for the Second World War. In today's shipping environment where the daily headlines are in the likes of “excess vessel supply continues to weigh on the dry bulk market” and “slower growth in steel output and reduced coal demand contribute to a declining freight rate environment”, we also need all the motivation we can get. Companies’ revenues have declined and many operators are in the red, some are chopping charter rates, we hear about bankruptcies, restructurings and anyone can easily paint a very bleak outlook for the next couple of years.
According to the IMF, global growth in 2014 was 3.3% and in 2015 - 2016 it is projected to be 3.5 and 3.7 percent respectively. It is notable that the 2015-16 projections were revised downwards by 0.3% in October 2014, reflecting the reassessment of prospects in China, Russia, the euro area, and Japan, as well as weaker activity in some major oil exporters because of the sharp drop in oil prices. The United States is the only major economy for which growth projections have been raised.
In January 2014 the dry bulk fleet (over 20,000tons dwt) stood at 8,979 vessels or 697,63million tons deadweight. During 2014 the net growth (deliveries/additions minus demolitions/removals) was 5% in terms of deadweight (a closer proxy to the carrying capacity). Given the fact that there is high correlation between global growth and seaborne trade, unless the GDP growth is higher than the fleet growth, then simply put “the ships are always too many for the cargoes”. With the world growth at 3.3% in 2014 it is evident that the world fleet has been under-utilized and supply has exceeded demand.
In 2015 demolition levels and slippage/cancellations/conversions will be the key. Let’s look at some numbers. The current dry fleet is at 737.65 million tons deadweight while the dry orderbook for 2015 stands at 69million tons deadweight. Assuming that only 80% of this will be delivered (due to slippage, cancellations, conversions etc.) the increase will be 55.2mil tons deadweight. If demolition activity, which has kicked off the year encouragingly, ends up being similar to the levels of 2012, it will be a huge relief valve. In 2012 according to our data about 30million tons dwt was scrapped so if this repeats, the net growth of the fleet will be about 25million tons dwt or 3.4%. This is quite marginal against the projected global growth for 2015 but it may very well signal a balanced supply-demand outlook. So any upside on either the supply (more cancellations, more demolition) or the demand side (the boost to global demand from lower oil prices could be greater than is currently factored into the projections) can reverse the current situation.
The obvious question is if demolition activity can indeed reach 2012 levels. Well, the fleet of ships older than 25 years stands at 29.4mil tonnes i.e. a shade lower than the “required” volume that needs to be scrapped; another 40mil tonnes deadweight are the ships between 20-25 years. In the first two months of 2015, we have already seen much younger vessels sent for scrap. So the relief valve is there and needs to be kept open. Upcoming regulations that will require the shipowners to invest in upgrading their assets will also help in that direction since older assets will not be worth the investment.
So there you have it, there is a quite plausible scenario that can play out this year that can shift things towards the right direction and as long as a series of logical events occur, then we may be looking at a stronger and more balanced 2nd half of 2015. So, Keep Calm and Invest in Dry.
By Theodore Ntalakos
Newbuildings / SnP Broker
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Wednesday, 18 March 15
Q2 INDONESIAN COAL SWAP DROP 1.45% M-O-M; GAIN 0.63% W-O-W
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and gained week over week.
The Q2 swap fell US$ 0.70 (1.45%) ...
Tuesday, 17 March 15
GAS TO CHALLENGE COAL IN THE ASIAN POWER GENERATION MIX - WOOD MACKENZIE
KNOWLEDGE TO ELEVATE
Wood Mackenzie says that coal is facing increasing competition from gas in the power sector. Coal has dominated as the fu ...
Tuesday, 17 March 15
RIO TINTO PAID US$ 7.1 BILLION IN TAXES IN 2014
COALspot.com: Rio Tinto has published its latest Taxes paid report, detailing the US$7.1 billion in taxes paid by the company around the world in 2 ...
Tuesday, 17 March 15
NEARLY 17% OF US COAL PRODUCTION UNECONOMIC AT CURRENT MARKET PRICING - WOOD MACKENZIE
COALspot.com: Close to 17% of forecast 2015 US coal production is at risk of idling or closure, totalling 162 million short tons (Mst), as these mi ...
Tuesday, 17 March 15
Q3' SA COAL SWAP CLOSED $57.30 PMT W/E 13 MARCH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and gained week on week.
The Q2 swap has fe ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- The University of Queensland
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
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