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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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Wednesday, 05 August 15
COAL CONSUMPTION POSTED THE STRONGEST GROWTH AMONG THE FOSSIL ENERGY SOURCES IN 2014 - VDKI
Coal 2014: again the world's fastest-growing primary energy source and an indispensable asset for the success of the energy turnaround.
Ac ...
Wednesday, 05 August 15
FOB INDONESIA THERMAL COAL SWAPS FALL
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week, this past week.
The 4Q swap was declined $ ...
Wednesday, 05 August 15
DRY BULKER PRICES START TO FIRM UP AS MARKET SENTIMENT IMPROVES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Market pessimism in the dry bulk industry, a trend which had established itself over the course of the year, has started to fade away over the past ...
Tuesday, 04 August 15
FOB RICHARDS BAY COAL SWAPS CONTINUE TO FALL DUE TO SLIDING DEMAND
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined month over month and week over week.
The 4Q swap was down US$ ...
Tuesday, 04 August 15
SHIPPING CYCLES - A CHESS GAME YOU DON'T WANT TO LOSE - CLARKSONS
Ingmar Bergman’s classic movie The Seventh Seal is about a knight who, during the Black Death, challenges Death to a chess match, in the hope ...
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- Kartika Selabumi Mining - Indonesia
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- Bangladesh Power Developement Board
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- PTC India Limited - India
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- Grasim Industreis Ltd - India
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- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
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- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
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- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
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- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
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- Petrochimia International Co. Ltd.- Taiwan
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- Essar Steel Hazira Ltd - India
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- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
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- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
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- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
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- Bharathi Cement Corporation - India
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- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
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- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
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- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
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- Trasteel International SA, Italy
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- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
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- Vedanta Resources Plc - India
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- Power Finance Corporation Ltd., India
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- Wilmar Investment Holdings
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
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- Indo Tambangraya Megah - Indonesia
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- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
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- Economic Council, Georgia
- IEA Clean Coal Centre - UK
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- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
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- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
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- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
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- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
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- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
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- Kohat Cement Company Ltd. - Pakistan
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- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Planning Commission, India
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