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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, 11 March 15
RICHARDS BAY COAL SWAPS DROP $ 3.65 - 4.0/T W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has fell US$ ...
Wednesday, 11 March 15
DRY BULK MARKET CLOSED OFF ON THE GREEN FOR A SECOND WEEK IN A ROW - INTERMODAL
COALspot.com: The Dry Bulk market closed off on the green for a second week in a row, while the performance of Capesizes hindered a more substantia ...
Wednesday, 11 March 15
MARKET INSIGHT : NEWBUILDINGS - PANOS TSILINGIRIS
From a cost-based, buy-low perspective, there is currently a buying opportunity in the second-hand dry bulk market. I am an anti-cyclical (buy-low) ...
Wednesday, 11 March 15
DRY BULK MARKET: ALL IS NOT LOST FOR A RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The low cost of commodities across the board could trigger an increase of trade among many countries, which in turn could lead to a recovery of the ...
Wednesday, 11 March 15
U.S. ELECTRIC GENERATING COMPANIES TO ADD MORE THAN 20 GW OF GENERATING CAPACITY IN 2015; 16 GW OF GENERATING CAPACITY IS EXPECTED TO RETIRE IN 2015
COALspot.com: In 2015, electric generating companies in U.S. expect to add more than 20 gigawatts (GW) of utility-scale generating capacity to the ...
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- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- PTC India Limited - India
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
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