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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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Sunday, 21 June 15
SPOT RATE AVERAGES FOR FREIGHT FROM INDONESIA TO INDIA REMAIN STRONG THIS WEEK
COALspot.com: The freight market was quite firm this week compared to last week. The BDI was up 21% week on week and closed at 779 points. The cape ...
Friday, 19 June 15
U.S. WEEKLY COAL PRODUCTION UP SLIGHTLY COMPARED TO LAST WEEK; CONTINUES TO BE DOWN FROM LAST YEAR
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 15.4 million short ...
Friday, 19 June 15
INDONESIA'S COAL-TRAFFICKING PROBLEM REQUIRES IMPARTIAL INQUIRY - JAKARTA GLOBE
Indonesia, the leading supplier to the seaborne thermal coal market, produces 420 million tons of coal per year, according to its official tally.
...
Thursday, 18 June 15
THE FAR EAST HANDYSIZE, HANDYMAX, SUPRAMAX MARKET REMAINED STEADY LAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market closed off on Friday (last week) noting small gains on the back of stronger performance in the Panamax segment, w ...
Thursday, 18 June 15
MERCATOR'S KAMSARMAX FIXED WITH CLEARLAKE
COALspot.com: Mercator Lines (Singapore) Limited, a leading Indian-owned international dry bulk shipping company focused on markets such as India, ...
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- Siam City Cement - Thailand
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
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