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Monday, 23 November 15
DRY BULK MARKET: NET FLEET GROWTH IS SLOWING DOWN, AS SHIP OWNERS ARE LOOKING FOR WAYS TO ALLEVIATING MARKET MELTDOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 The dry bulk market has been in “meltdown” mode for a few weeks now, unable to find support and avoid the fall in historical lows. As such, it’s worth taking a closer look at the factors which can support rates in the future. In a recent analysis, dry bulk ship owner Precious Shipping, said that “the dry bulk sector is chronically over-supplied and will remain so over next few years. However let’s not forget that global seaborne trade is still growing steadily from a historical perspective. But the market needs time to realign supply with demand. In the meantime we need to manage our expectations and keep our faith in the industry. Shipping is prone to surprises and things can change pretty quickly”.
For instance, in terms of future supply developments, the world bulker fleet growth has slowed down considerably over the course of the past year. According to Precious Shipping’s analysis, “we started 2015 with 770.34 MDWT and have increased to 781.74 MDWT by the end of Q3 for a 1.48% net fleet growth. A further 5.76% (44.40 MDWT) is scheduled for delivery in the balance of 2015 and another 8.73% (67.23 MDWT) scheduled for delivery in 2016. If we were to apply a slippage factor of 40% to these scheduled deliveries and further assume that scrapping reaches 36 MDWT per annum we would be left with a net fleet growth of 3.22% (795.12 MDWT) in 2015 and another 1.89% (810.12 MDWT) in 2016. Net fleet growth is increasing, but marginally, compared to the recent past”, said Precious.
The ship owner added though that “the situation in China is partially obscuring a real change that has taken place in the capesize market (which has been driven by the capesize fleet shrinking while iron ore production from the major miners is increasing). Many had expected Q4 strength in the capesize market, but the strength has begun in July. This is real change, and one that is become somewhat obscured due to panic over Chinese equity prices”. Precious then described a scenario, which, so far has failed to materialize. It has said that “going forward, we remain bullish for capesize rates for Q3 2015 and Q4 2015. Iron ore exports from major miners will rise during the upcoming months. If China is still buying the iron ore (which is very likely), capesize availability is likely to see upcoming periods in H2 where vessel availability is much tighter and this is what drives freight rates”.
Demand-wise, Precious wondered if “Peak Coal” is a reality in China? According to the owner, “China is the world’s largest consumer of coal, accounting for nearly half of global demand. The leading source of domestic demand is naturally power generation, which accounts for about two-thirds of coal consumption in the country. With air pollution and environmental degradation becoming increasingly acute social emergencies, significant effort and investment is being made by the government to try to reduce the country’s reliance on fossil fuels. Domestic coal mining has itself been at the center of a storm. This is a very fragmented industry, with an appalling environmental and safety record, and recently also in terrible financial shape as most mines are losing money. There seems to be very little incentive to support the industry, except in an attempt to save jobs in areas of the country where few alternatives exist. China’s domestic coal output has been essentially flat in 2013, and even declined marginally in 2014 and in the first half of this year. Therefore, there could actually still be hope for imports to rebound. Never say, never”.
Analyzing China’s economic transition, Precious noted that “averaging almost 10% per year in the thirty years from 1978 to 2008 the pace of China’s growth is in the process of slowing to probably half that, albeit on a substantially larger base. China’s gradual transition from investment-led to consumer-based growth is necessitated by the fact that it no longer gets a reasonable return from every dollar invested at home. It has chronic industrial and manufacturing overcapacity that has been built up to support jobs, jobs that require ever higher wages. Now that excess production, in the context of weak domestic and overseas demand, is causing falling prices and negative profit margins. The solution is a grand plan to rebuild the old Silk Road by taking advantage of absurdly low borrowing costs to invest in other people’s infrastructure. The project was first mentioned in 2013 but gained momentum in March as Chinese growth was noticeably decelerating. China’s surplus capital, labour and productive capacity can be mobilised to get a better investment return across a vast footprint that includes southeast Asia, the Subcontinent, the Middle East, central Asia and eastern Europe and well over 3 billion people. Chinese Premier Li Keqiang speaking at the World Economic Forum in Dalian said China is on track to meet all its economic targets for this year despite fears of a deepening slowdown in the world’s second largest economy. China would take more steps to boost domestic demand and implement more policies to lift imports, he said”.
In the meantime, “2015 is turning out to be another challenging year for the Chinese steel industry. However, we believe this to be cyclical rather than structural, and a recovery is expected next year, in terms of both steel demand and ore imports. We are still far from ‘peak steel’. China’s steel use per capita, at 515 kg, is still modest for a country at this stage of development. The USA, Japan and Germany peaked at well over 700 kg in the 1970s and 1980s. China is flooding the world with cheap steel at an unprecedented rate and keeping some shipping lanes busy that would otherwise be quiet. For the first seven months of the year, exports were up 27% to 62.13 MMT and could reach 111 MMT by the end of the year, according to forecasts from commodities researchers at Macquarie. Grain imports into China continue to forge ahead and at the 8 month point are up 10.8 MMT (19%) to 66.3 MMT y-o-y. Soyabean imports stand at 52.4 MMT up nearly 5 MMT, whilst barley imports have nearly trebled to 7.4 MMT; corn imports also more than doubled to 4.4 MMT and wheat imports are slightly lower at 2 MMT. This significant increase in grain imports contrasts to that of coal where imports into China have declined by 60 MMT (-32%) y-o-y whilst iron ore imports have also registered a modest decrease of 1.4 MMT (-0.2%) y-o-y”.
Additionally, “despite the macroeconomic numbers, Chinese Iron Ore imports reached 699.43 MMT by end September for an annualized total import of 932.57 MMT or almost identical to the 933.11 MMT in 2014. Chinese Steel production reached 606.73 MMT by end September for an annualized total of 808.97 MMT or a marginal decrease of 0.53% compared to the 813.30 MMT in 2014. Chinese Steel exports reached 73 MMT by end September for an annualized total of 97.33 MMT or an increase of 3.77% compared to the 93.79 MMT in 2014. Coal imports into China reached 156.47 MMT by end September for an annualized total of 208.63 MMT or a decrease of 28.46% over the 291.63 MMT imported in 2014. In a country that currently produces and consumes just under 4.0 BMT of Coal per annum even a small change in their Coal requirements via imports could have a dramatic impact on the dry bulk freight markets”, Precious Shipping concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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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 ...
Friday, 04 September 15
GOVERNORS WILL HAVE THE POWER TO REVOKE MINERS' PERMITS: ENERGY MINISTRY - JG
Starting Oct. 1, Indonesia's governors will lawfully become "executors" in revoking the licenses of miners that fail to secure a &quo ...
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- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Parliament of New Zealand
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Australian Coal Association
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
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