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Friday, 28 August 15
DRY BULK SHIP OWNER OPTIMISTIC ABOUT FUTURE PROSPECTS OF THE MARKET: NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Dry bulk ship owner Golden Ocean appeared optimistic on the long term prospects of the dry bulk market, mainly thanks to an expected resolution of the oversupply problems of the market. The owner added in its second quarter report that the average spot rates so far in the third quarter are higher than the rates in the first half of 2015, which means that the company’s revenues are expected to improve compared to the two previous quarters. Golden Ocean noted that following two very weak quarters, the third quarter started with more optimism, in particular, for the Capesize segment. With a spot market close to $20,000 per day it was questionable whether it was a structurally damaged market balance due to oversupply. “Then a three step devaluation by the Chinese Central Bank and a very nervous Chinese stock market removed all signs of optimism over a fortnight. With falling commodity prices and growing uncertainty in general, activity among dry bulk charterers is low at present. Short term this could be painful for owners of dry bulk assets, but in a longer term perspective the supply side should repair itself faster than previously anticipated”, Golden Ocean said.
In any case, according to the shipowner, the dry bulk spot market in the second quarter of 2015 did not give owners of dry bulk vessels any relief. “Rates ended up more or less at similar levels as in the pervious quarter and with limited volatility. According to the Baltic Exchange, average earnings for the Supramax segment were $6,766 per day compared to $6,434 per day in the previous quarter and $8,982 per day in the same quarter last year. Capesize vessels were again facing the lowest earnings with an average of $4,600 per day against $4,582 per day the previous quarter and $11,901 per day in the same quarter last year. Panamaxes earned on average $5,183 per day compared to $4,815 during the first quarter and $6,304 in the same quarter in 2014″.
FLEET SUPPLY
According to Golden Ocean though, the low utilization of the dry bulk fleet the first six months of the year has been due to demand issues rather than increased supply. “Actual deliveries for the first six months amounted to 110 Handysize vessels, 159 Handymaxes/Supramaxes, 88 Panamaxes/Kamsarmaxes and 57 Capesize vessels. During the first half of 2015 less than 27 mdwt were delivered. Even though the delivery rate picked up slightly during the month of July it is unlikely that the delivery ratio will exceed 65 per cent of the official order book this year. At the same time scrapping prior the monsoon season in June/July was beating most analysts’ expectations. For the entire sector above 10,000dwt, 300 vessels have been scrapped. The net effect of this is that after seven months into the year there is still zero net fleet growth for Handysize and Capesize”, said Golden Ocean.
The ship owner added that “historically, limited number of vessels will be delivered during the fourth quarter and in spite of fewer removals due to a combination of improved spot market and lower scrap prices, net fleet growth in 2015 will most likely end up at less than 3 per cent of additional capacity. In aggregate the total order book to fleet ratio fell below 18 per cent at the end of the second quarter, which marks the lowest level since 2003. Still many analysts believe that the official order book is bigger than reality. The positive trend on the supply side is definitely needed due to softer demand for dry bulk commodities”.
DRY BULK DEMAND
In terms of demand, Golden Ocean said in its report that “we witnessed a slight improvement in total demand in the second quarter of the year compared to the previous slow quarter. Measured in tonne miles demand for dry bulk commodities grew by one per cent compared to first quarter, but still one per cent lower than same quarter last year. Uncertainty and conflicting information from the most important country for dry bulk transportation is still making the headlines. The devaluation of the renminbi by the Chinese Central Bank took many by surprise. It is not expected that this will have a significant impact on import levels. Compared to the average exchange rate in January this year, the currency is trading 4 per cent lower while the average spot price for iron ore is 15 per cent lower than the January average price. Chinese steel consumption (observed) was 4.3 per cent lower in the second quarter compared to the same quarter last year, but increased by 3.5 per cent compared to the previous quarter. Chinese iron ore imports for the first half the year ended at 453 million mt, followed by a strong 86 million mt in July. This is 15 per cent up from previous month and the highest monthly import figure seen in 2015. It is interesting to note that iron ore inventories remain at relatively low levels and almost 30 million mt lower than same time last year. Australia and Brazil continue taking market share from marginal producers and are up 30 million and 10 million tons, respectively, in the first seven months of 2015. New capacity from both countries is expected to be made available in the coming months represented by Roy Hill in Australia and new production from Vale. Coal imports to China continue to be the most negative contributor to dry bulk demand and are 34 per cent lower year-on-year for the first seven months of 2015. July showed a similar uptick in imports as for iron ore and for the last few weeks Chinas southwestern regions received less rain than usual. As a consequence hydro power production in July fell for the first time since October 2013. Given that China imports only six per cent of the coal it consumes, the sensitivity and uncertainty is substantial. Limited new hydro power capacity will be introduced over the next five years. India’s growth in coal imports is steady, but at a slower pace last two months. In the first half of 2015, the country imported 120 million mt which is almost 30 million mt more than the same period previous year”, Golden Ocean noted.
Ship prices
The soft freight market continued to put downward pressure on asset values for all vessel classes during the second quarter. According to industry sources, prices fell by 7.5 percent to 12.5 percent depending on the country of construction. Asset prices have reacted positively so far in third quarter to the improved spot market freight environment and most analysts are of the opinion that the industry has seen the bottom in this cycle”, the shipowner concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Monday, 07 September 15
CFR SOUTH CHINA COAL SWAPS ROSE 1.1 PER CENT WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.52 (3 %) per MT month over month.
A commodity sw ...
Sunday, 06 September 15
AUTOMATION AND TECHNOLOGY IS CERTAINLY PART OF THE SOLUTION FOR IMPROVING PERFORMANCE AND EFFICIENCY TO MAKE THE MINE OPERATIONS MORE PROFITABLE, HOWEVER............ - LUKE JALSEVAC
"The Technology and Innovation in Mining 2015" production team at Information Exchange Group interviewed Luke Jalsevac, Director, Busines ...
Sunday, 06 September 15
THE CAPE SIZE INDEX ROSE 10.83 PER CENT WEEK OVER WEEK
COALspot.com: The BDI, the Baltic exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, declined o ...
Saturday, 05 September 15
DRY BULK MARKET MAY SUFFER NOW, BUT IS BOUND FOR A RECOVERY THANKS TO A LIMITED FUTURE FLEET GROWTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The slow increase of dry bulk tonnage growth this year could turn into a solid indicator of the market’s future prospects. According to a rec ...
Friday, 04 September 15
U.S. COAL PRODUCTION FOR THE W/E AUGUST 29, UP SLIGHTLY; FALL 4.5 PERCENT Y-Y: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.7 million shor ...
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- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Australian Coal Association
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
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