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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.
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Monday, 09 March 15
CHINA'S IMPORTS - NEVER MORE IMPORTANT TO SHIPPING? - CLARKSONS
Over the last 15 years China has led maritime forecasters a right old dance. In 2002, rumours that Chinese iron ore imports were about to take off ...
Sunday, 08 March 15
FREIGHT RATES FROM INDONESIA TO INDIA IS TRENDING UP
COALspot.com: The freight market continued to see gains this week and all the indices were rose except for Cape index. The BDI was increased 4.62 p ...
Friday, 06 March 15
BALTIC DRY INDEX: IS THIS POWERFUL INDICATOR SIGNALING A GLOBAL RECESSION? - STREET AUTHORITY
Although memories of the Great Recession linger, a case can be made that better days lie ahead.
That’s because central banks around the ...
Friday, 06 March 15
U.S. WEEKLY COAL PRODUCTION ROSE 3.5% WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.1 million short tons (mmst) of coal ...
Thursday, 05 March 15
PANAMAX : THE ATLANTIC ROUND IS NOW PAYING AROUND US$ 5K PER DAY
COALspot.com: Handy - The activity in the handy/supra segment is back. “ We see more fresh cargo in the market for 2nd half March dates ...
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- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- White Energy Company Limited
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Australian Coal Association
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
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