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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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- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- PTC India Limited - India
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Economic Council, Georgia
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Australian Coal Association
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- The Treasury - Australian Government
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
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