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Monday, 12 October 15
DRY BULK SHIPPING: MARKETS ARE SLOWLY IMPROVING FROM A VERY LOW LEVEL AS THE DEMAND SIDE FALTERS - HELLENIC SHIPPING NEWS
 The dry bulk market is in the midst of a shift in demand patterns, which coupled with a tonnage supply overhang, has been facing headwinds over the past few years. In its latest short-term outlook, BIMCO noted that “when traditional demand growth is not increasing, we need to look harder for future growth. Here the glut of high-iron-content ore in the international markets and the following low prices may finally bring around a sizeable substitution in consumption by Chinese steel mills, away from the domestically produced low-iron-content ore, in favour of imports”.
“Calculations done by BIMCO show that monthly imports into China could be 20mt higher per month (+26%). A total of an extra 240 million tons on an annual basis could bring deployment for around 155 Capesizes, assuming an unchanged distribution between Australian and Brazilian imports (75%/25%). Last year, Australia grew its share significantly as 90% of Chinese incremental demand came from Australia.
As Brazilian miner Vale is expecting to grow its output over the next year, this would improve the prospects. Working against would be more Brazilian ore transported on 400,000-DWT Valemax class ships operated by the miner itself or related parties”, BIMCO noted in its report.
As such, it concludes that “for the coming months: September-November, BIMCO expects the supply of new ships to stay subdued and slow paced towards the end of the year. The deteriorating demand-side conditions are expected to be somewhat reversed as we move into the stronger months of the year. The vital commodities, coal and iron ore, are both expected to be in higher demand in coming months, enhancing owners’ and operators’ opportunities to find employment for their ships. Altogether this should support the freight rates although no large-scale improvement to the fundamental balance is likely to develop”.
According to BIMCO’s Chief Shipping Analyst, Peter Sand, “the shipping market and underlying profitability can only improve if the fundamental conditions (supply and demand) also improve. Therefore transportation of larger volumes, longer sailing distances in general or a lower increase of dry-bulk fleet size is a prerequisite for better markets to arrive. On the first issue about more commodities, we have seen coal as the primary culprit so far, with grains potentially also sinking into the red before the end of the year. Volumes of steam coal and coking coal are both contracting notably, and our forecast is for an annual decline in transport driven by the lack of demand from China (-51 million mt) in the East and the UK (-13mt) in the West cushioned by increased appetite for imported steam coal in India (+16mt). Prospects for the latter have declined somewhat over the summer as domestic production and power-plant stocks both have risen”.
At the same time, “the coal-exporting nations suffering from this decline in demand are the two giants, Indonesia and Australia, while US exports are down on lower UK imports. On the positive side, the longer-than-normal grain season in South America has benefited primarily the Supramaxes, which apparently defy gravity as being the segment with the highest freight rates, while also facing the biggest increase in fleet size in the dry-bulk sector. Additionally, strong steel exports out of China have contributed to higher Supramax fleet use”.
BIMCO’s report also noted that “the second issue about ton–miles has also come into play this year as a part of the decline in coal has cut off the longer trades at the expense of the shorter hauls. The complete absence of South African thermal coal exports to China for more than a year now is a devastating example of this, especially when it is substituted by non-seaborne imports. In 2014 South Africa supplied China with 5.2mt of thermal down from 12.4mt in 2013.
Meanwhile, “the freight rates for all dry-bulk segments have been low throughout 2015, the July/August spike for Capesize ships being the short-lived exception. Averages for the first eight months of 2015 range from USD 5,605 per day for a Handysize to USD 8,163 per day for a Capesize. The poorest freight market on record is due to a combination of demand weakness and capacity abundance. Unfortunately, there are no easy ways to escape this. As China is going through a period of transition that does not favour the dry-bulk shipping industry, the prime driver is out of the picture. Capacity has been abundant for years, so it’s the change to the demand side, the variable that the industry cannot impact, which is at the epicentre in 2015”.
Supply-wise, BIMCO said that “speaking of the contributing factors to an improved shipping market, the dry-bulk fleet has grown only marginally during the first nine months. The inflow of 39.7 million DWT, which has been offset by demolition of 23.8 million DWT, means a fleet growth of just 2.1%. Continuance of a low fleet growth is vital to achieving an eventual recovery and a return of sustainable earnings for the industry. A central element in that equation is a low level of new orders. This has been accomplished by a landslide margin. In Clarksons orderbook statistics, there were only 84 new contracts recorded at the end of August. Such a cautious attitude is quite the opposite of what happened less than two years ago, when capacity equal to the year-to-date amount in 2015 (4.7 million DWT) was contracted in just 16 days!”
According to Mr. Sand, “demolition also holds a key position in today’s and tomorrow’s fleet-growth level. Although 306 ships have left the fleet so far in 2015, owners’ interest in making use of the demolition “tool” to limit supply growth seems to have evaporated completely over the summer. In early July, BIMCO cautioned that a new full year record level of demolished capacity would not arrive in spite of a record first half of the year. Unfortunately, our expectations have proven to be all too right. Spiking Capesize rates immediately cooled owners’ interest in the hope that a market rebound was around the corner”.
Furthermore, the strong Chinese steel export at discount prices to the countries that used to prefer scrap steel to new steel means that scrap prices keep heading lower and lower as volumes decrease. “Only 37 ships were sent to the blow torch in July and August. As trading conditions continue to challenge all shipowners and operators, everything that can be done to delay the delivery of the next ship has been done within the legally binding nature of a newbuilding contract. It is not easy to discuss terms with shipyards at a late stage in the building process, but the result is now clear. 2015 is about to receive “only” 49 million DWT, which will bring fleet growth down to a 10-year low at 2.5%”, BIMCO concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Friday, 28 August 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING AUGUST 22 ROSE FOR THE THIRD STRAIGHT WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.5 million shor ...
Friday, 28 August 15
BANPU STRENGTHENS GROWTH PLAN
Coal Business: Asia-Pacific Synergies Increase Competitiveness for Premium Export Market.
Banpu Public Company Limited (BANPU) strengthens its ...
Thursday, 27 August 15
RATES FOR CAPES REMAINED ON A FREE FALL LAST WEEK - INTERMODAL
COALspot.com: Keeping everyone on their toes with the volatility seen in August, the Dry Bulk market undoubtedly remains a steady provider of chall ...
Wednesday, 26 August 15
MARKET INSIGHT - STRATOS TINIAKOS
It’s always interesting to comment on the market when big economies around the world are facing troubling times. Following the collapse of th ...
Wednesday, 26 August 15
2Q'16 FOB INDONESIA COAL SWAP FALLS NEARLY 4.76 PER CENT M-O-M
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week.
The 4Q swap was declined $ 2.20 (-5.13%) p ...
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- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- The University of Queensland
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- CNBM International Corporation - China
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
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