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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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Thursday, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
Thursday, 05 March 15
BUKIT ASAM BOOKED US$ 1 BILLION REVENUE IN 2014
COALspot.com: Indonesian publicly listed and state owned coal miner PT. Bukit Asam, has announced that, the revenue of the company for the period J ...
Wednesday, 04 March 15
AN AGENDA FOR CHANGE - FITCH INDONESIA CONFERENCE
Fitch Indonesia Conference - 5 March 2015
Fitch Ratings will host its annual Indonesia conference on 5 March 2015.
The theme of this year ...
Tuesday, 03 March 15
INDONESIAN COAL EXPORT VOLUME TO DECLINE 50% BY 2019
COALspot.com: The Indonesian government is planning to reduce coal export volume by 50% within the next five years while keeping its coal productio ...
Tuesday, 03 March 15
INDIAN THERMAL COAL IMPORTS: STEAMING FORWARD - CLARKSONS
Coal-fired power stations comprise around 60% of India’s power output, and with domestic supply issues and favourable international coal pric ...
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- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Planning Commission, India
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
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