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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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Friday, 03 July 15
U.S DELIVERS WEAK FIRST HALF COAL PRODUCTION; 8.8% LOWER Y-O-Y
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 15.5 million short ...
Friday, 03 July 15
SHIPPING CONFIDENCE EQUALS SEVEN-YEAR LOW - MOORE STEPHENS
Overall confidence levels in the shipping industry fell during the three months to May 2015 to a level equal to the lowest rating recorded in the p ...
Thursday, 02 July 15
TECHNOLOGY AND INNOVATION IN MINING 2015 - IXG
Information Exchange Group’s Technology and Innovation in Mining 2015- International Summit on Mining
Press Release: The inaugural editi ...
Thursday, 02 July 15
THE PERFORMANCE OF THE CAPESIZE SEGMENT PUSHED DRY BULK MARKET TO UPWARD LAST WEEK
COALspot.com: The Dry Bulk market continued its upward movement last week, with the BDI closing off on Friday (26 June) in excess of 800 points, wh ...
Wednesday, 01 July 15
Q4'15 AND Q1'16 FOB RICHARDS BAY COAL SWAPS ROSE W-O-W AND M-O-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 rose month over month and down week over week.
The Q3 swap was up US$ ...
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- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Minerals Council of Australia
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
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