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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, 26 June 15
INDONESIA COAL PRODUCTION FALLS BETWEEN JAN-MAY : JG
The Ministry of Energy and Mineral Resources announced that coal production declined to 166 million tons between January and May, a 19 percent drop ...
Friday, 26 June 15
COAL PRODUCTION IN THE U.S ROSE 6.0% WEEK OVER WEEK, SAYS EIA
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 16.3 million short ...
Thursday, 25 June 15
THE PORT OF NEWCASTLE SHIPPED 13.31% MORE COAL IN MAY 2015 COMPARED TO APRIL 2015
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.18 billio ...
Thursday, 25 June 15
CAPESIZE: PERIOD INTEREST REMAINED STRONG FOR A SECOND WEEK - INTERMODAL
COALspot.com: Following those depressive last six months, the BDI closed off on last Friday noting a substantial weekly increase, which pushed the ...
Wednesday, 24 June 15
PANAMAXES: THE OUTLOOK REMAINS NEGATIVE AS DEMAND FOR COAL IS DIMINISHING - YANNIS OLZIERSKY
As we get closer to the end of June, we can safely say that the 1st half of the year is leaving the dry bulk market with a bitter taste that we all ...
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- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- White Energy Company Limited
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Planning Commission, India
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
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