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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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Thursday, 09 July 15
CPP MARKET : POSITIVE IN THE SHORT TERM - GEORGE VASTARDIS
Despite the traditionally quieter summer period, the clean tanker market has so far experienced healthy activity especially East of Suez. Increased ...
Thursday, 09 July 15
LACK OF FRESH BUSINESS IN THE PACIFIC LEFT CAPESIZE RATES MOVING SIDEWAYS - INTERMODAL
COALspot.com: Intermodal ship broker says in its weekly report that, a different picture from what we saw the previous week was painted during the ...
Wednesday, 08 July 15
RIO TINTO'S MODERNISED KITIMAT SMELTER BEGINS PRODUCTION; KITIMAT BECOMING ONE OF THE LOWEST COST SMELTERS IN THE WORLD
COALspot.com: Rio Tinto is preparing its first shipments of metal from its world-class Kitimat aluminium smelter in Canada following an extensive m ...
Wednesday, 08 July 15
Q3'15 INDONESIA COAL SWAP DECLINED 3.14% MONTH OVER MONTH
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 $ ...
Tuesday, 07 July 15
FOB RICHARDS BAY COAL SWAPS DECLINED WEEK OVER WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 declined month over month and week over week.
The Q3 swap was down US$ ...
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- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Interocean Group of Companies - India
- MS Steel International - UAE
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
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