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Thursday, 18 June 15
DRY BULK SHIPPING: LOWEST FLEET GROWTH IN 10 YEARS MAY NOT PROVE ENOUGH AS DEMAND IS NOT KEEPING PACE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 The demand side of things in the dry bulk market seems unable to keep pace with even the slightest fleet growth, a sign of the demise that the industry is suffering from. According to BIMCO’s latest short-term outlook, the BDI (Baltic Dry Index), started 2015 at 771 points, only to retreat to a historical low of 509 points on the 18th of February. “Since then it has improved but only on a couple of occasions has it been above 600. The market conditions are devastating and volume growth in 2015 on key trades is negative. The lack of coal imports into China is taking centre stage, and lost volumes are difficult to make up elsewhere. The (still) positive iron ore demand is overshadowed in significance as the negative coal market makes headlines”, said the report.
According to BIMCO, “dry bulk is under pressure on the commodity side and since the beginning of 2014 iron ore prices have slid. That development has made some of the mining companies alter their expansion plans of placing more iron ore on the market, when demand is obviously not as strong to uphold the former price level. From USD 140 per ton down to 42 in early April. Since then spot Australian Iron Ore FOB prices (Source: Commodore Research) has improved. By end-May, Australian iron ore (63% iron content) was priced at just above USD 60 per ton. This is very positive as it proves demand is there despite steel production growth being negative in China (-1.7%) as well as rest of the world (-1.9%) during Q1. In 2014, Chinese steel demand contracted for the first time since 1995. As the Chinese economy is now changing, so is its steel demand. The knock-on effect for the dry bulk market will depend on the extent to which imported ore takes market share from domestically mined ore as well as absolute level of steel production. Current forecasts for global iron ore demand growth in 2015 is positive, at 3% (Source: SSY)”, said the report.
Meanwhile, the other significant commodity, coal, is doing really bad in China while improving in India. “Total Chinese coal imports for the first four months in 2015 came in at 68 million tons (Source: Chinese customs). Down by 38% – same period last year. Both thermal and coking coal markets as well as lignite are suffering. The landed cost of coal into China at the end of May is not favouring imports despite very low freight rates. For thermal coal, SSY expects Chinese imports to contract by 30 million tons, while expectations for Indian imports is a plus at 20 million tons. Last year China imported a total of 291 million tons, distributed with 165 million tons of thermal coal, 62 million tons of coking coal and 64 million tons of lignite. These numbers include seaborne as well as land borne imports”, said BIMCO.
In terms of supply, since the turn of the year, the dry bulk fleet as a whole has only grown by 0.5% and since early February, the fleet has not grown at all. This has happened as the demolished volumes have matched the number for newbuildings being delivered. According to BIMCO, “the Capesize fleet is actually smaller today than half a year ago (beginning of November). The development in Panamax and Handysize segment is flat, whereas the Handymax/Supramax segment has grown as we expected it to. In spite of 1 million DWT of Handymax capacity being demolished, 6 million has been delivered, equal to a growth in supply for that sub-segment of 2.9% for the year to date. For the year 2015, BIMCO expects supply growth to be at 3.8%. This is a downward revision of our estimation three months ago, and it rose out of our adjustment of demolition volumes expected for 2015. As the poor freight market bites harder at an extended time, BIMCO anticipates 30 million DWT to leave the fleet during 2015 and 17 million DWT to have been sold for demolition end of May. Owners have dug deep in the first five months of 2015 whilst continued devastating freight market keep demolition volumes high. An improved freight market is expected to cool demolition interests swiftly”.
Additionally, “another positive development is found on the contracting side. 35 new orders have been placed at global shipyards so far this year (1.8 mill. DWT). 7 Panamaxes, 12 Handymaxes, 16 Handysizes and no Capesizes have been added to the order book, which now stands at 1,750 ships with a combined capacity of 142 million DWT. This is to the shocking fact of 1,981 ships which were contracted during 2013-2014″.
In its outlook for the market, BIMCO said that “it is a small consolation that Indian coal imports may go up by 20 million tons, when Chinese imports drop by 30 million tons for the second year running. Despite a very bad sentiment in the market, BIMCO expects volume to increase as we move into Q3. More Brazilian iron ore and grains (wheat and coarse) moving into the market as the soya season abates, should on an overall level, prohibit the market to go into reverse – if volumes contract. The momentous imbalance between supply and demand continues to worsen in spite of a noteworthy 10-year low supply growth rate. 160 million DWT of new orders placed in 2013/14 can only do harm when demolition activity fails to slash any records by a never-seen-before margin. As the demand growth for dry bulk seaborne transportation seems to weaken too, potentially even on a permanent basis as China changes gear, the industry must adapt to become profitable again. Wait-and-see strategies may turn out to take too long. If we are to believe that current utilisation levels are just around 70%, new orders should not just cool down for a while, they must be sensitively counterbalanced with demolition for a number of years, not just a few quarters”.
It concluded its analysis by noting that “for the coming months: June-August, BIMCO expects the market challenges to stick. The demand side is so weak right now, with China reducing coal import by 40% that it dwarfs most of the positive aspects of the market. On the upside we see owners limiting fleet growth by increasing demolition of obsolete tonnage. Whether this work on the supply side will prove to be effective enough to improve the fundamental balance only time will tell”.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Monday, 20 July 15
CFR SOUTH CHINA COAL SWAPS GAIN WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 1.18 (2.27%) per MT month over month.
A commodity swap ...
Sunday, 19 July 15
BDI GAINED AND CROSSED 1000 MARK THIS WEEK
COALspot.com: The BDI gained and crossed 1000 mark after many months this Friday. The BDI was up almost 20 pct and closed 1048 points on 17 July 20 ...
Saturday, 18 July 15
INTERVIEW : FRANZ ESCALANTE, CHIEF OF INFORMATION SYSTEMS, MINERA CHINALCO, PERU
We are interested in the technology of Autonomous trucks, the new-generation trucks are not remote controlled, they are truly autonomous - Franz Es ...
Friday, 17 July 15
COAL PRODUCTION IN THE U.S. INCREASES SHARPLY FOR THE WEEK ENDING JULY 11
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 16.4 million short ...
Friday, 17 July 15
INDONESIAN POWER-STATION COAL SWAPS DECLINE CONTINUES THIS PAST WEEK
COALspot.com: Indonesian coal swap for delivery Q3 2015 declined month on month and week over week, this past week.
The Q3 swap was declined $ ...
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- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- White Energy Company Limited
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Planning Commission, India
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
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