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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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Tuesday, 03 March 15
Q4' FOB INDONESIA COAL SWAP CLOSED 2% LOWER COMPARED TO Q2 CLOSING PRICE OF $ 47.47
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose month on month and declined week over week.
The Q2 swap increased US$ 2.24 ...
Tuesday, 03 March 15
FOB RICHARDS BAY COAL SWAPS: Q2 UP 9.60%; Q3 UP 9.75% W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and week on week.
The Q2 swap has soared US$ 5 ...
Monday, 02 March 15
CFR SOUTH CHINA COAL SWAP FOR Q2 DELIVERY REACHED $ 57.50 PMT W/E 27 FEB 2015
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.37 (+2.44%) per MT month over month and declined US$ 0.42 ...
Monday, 02 March 15
BORYEONG POWER PLANT OF KOMIPO TO IMPORT 140K OF SUB-BITUMINOUS COAL FOR Q2
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids from coal producers, marketing companies, or traders to supply of 140,000 (70 ...
Monday, 02 March 15
FOB NEWCASTLE COAL SWAP ROSE 6.89% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.35 per MT (+6.89%) month over month and US$ 0.40 (0.78%) week on ...
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- Sical Logistics Limited - India
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Latin American Coal - Colombia
- Australian Coal Association
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- The University of Queensland
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
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