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Monday, 09 May 16
DRY BULK SHIPPING TO WITNESS STEADY PROGRESS MOVING FORWARD ON THE BACK OF GROWING TRADE VOLUMES - BIMCO
 In its latest short-term analysis of the shipping markets, BIMCO reiterated its optimism on the prospects of the dry bulk market moving forward. According to BIMCO, transported volumes are expected to grow slowly – as they seasonally do – from the first quarter into the second. This ought to underpin the freight market.
“Notably, we expect a new record volume of combined grain and soybean exports this year from Argentina and Brazil. We do not anticipate a massive rise in freight rates for handysize, supramax and panamaxes on the back of this, as ships are already waiting around the main loading areas. Nevertheless, it should give a boost in confidence, a confidence that Moore Stephens in March assessed to be at a record low”, said BIMCO’s report.
Another positive indication of China not being as vulnerable as some may believe, which is supporting the soft landing trajectory, is the improving domestic steel prices, seen since mid-February. In the international markets, spot iron ore prices have also rebounded from USD 41 per MT at the beginning of 2016 to see USD 56 per MT in mid-April. Very different from the peaks of the past, but a positive indicator in the midst of all this surrounding uncertainty.
“We are still worried about the sustainability of freight rates in the years to come. Our main worry is that demolition activity will slow down as the BDI improves. If shipowners slow demolition of ships considerably, the fleet will keep growing. This will widen the fundamental imbalance further because we forecast the demand side to grow slowly in the coming years. In order to reverse several years of adding capacity in excess of demand growth, we need to develop a multi-year trend of negative fleet growth. BIMCO assess the current utilisation rate of the dry bulk fleet at the low end of the 70s”, said the report.
Looking further ahead, BIMCO noted that “coal imports into India may change. If the retained political vision of making India self-sufficient in thermal coal becomes reality. Surely the jury is still out on that. In November 2013 the then Indian Power Minister Goyal was “very confident”, when saying India may stop thermal coal imports in two to three years, as domestic production would increase. Mr. Goyal, now being India’s Energy Minister repeated the exactly the same words in April 2016. “We want to completely stop its import over the next two to three years”. India imported 171 million tonnes of thermal coal in 2015, slightly down from 176 million tonnes in 2014. SSY expects India to import 170 million tonnes of thermal coal in 2016”, it noted.
Supply
Meanwhile, “despite a record high volume of demolished dry bulk shipping capacity in the first three months of 2016, the total dry bulk fleet still grew. 16.7 million DWT of new capacity entered the fleet while 14 million DWT was sold for scrap. All in line with BIMCO’s forecast.
Not all of the dry bulk sub-segments saw an increase in fleet size. The capesize fleet, for instance, which has doubled over the past 6½ years, reduced in number (7 ships less) as well as capacity (-0.2%) in Q1-2016. For the full year, BIMCO holds unchanged expectations for deliveries and demolitions, which means we expect the fleet to grow by 1.1% or 10 million DWT in 2016. What has changed though from our January report is the slippage rate of deliveries, now at 50% up from 40%. Owners and investors are working hard to delay the delivery of new ships into a miserable freight market”, said the report.
According to BIMCO’s Chief Shipping Analyst, Mr. Peter Sand, “as deliveries offer traces of past optimism, most interestingly the appetite for signing new contracts for dry bulk ships at the world’s shipyards has ceased. Until the middle of March, only four new contracts had been signed, three at Japanese shipyards and one in China. During March and April, the long anticipated orders for 30 VLOCs with a capacity of 400,000 DWT each are now confirmed. Lifelong time charter contracts (27-years) appears to have been awarded to all of them already. This is the latest development that ties China and Vale closer to each other again, after their fallout following the disputes over the original batch of valemax VLOCs which were not allowed to call at Chinese ports for several years”.
He added that “without doubt this is bad news for international owners and operators. Each VLOC can carry an estimated 1.6m tons of iron ore from Tubarao, Brazil to Baoshan, China per annum. This new batch of VLOCs, will remove 48 million tons of iron ore from the “open market”. As the current fleet of 34 VLOCs (2011-2015) already carries a total of 54.4m tons of cargo, the best front-haul leg in dry bulk shipping is crippled even further by this industrialisation of trade. In 2015, Brazil exported 191.6 million tons of iron ore to China; the existing and new valemax between them will be able to carry over half Brazil’s current annual iron ore exports. The 30 new VLOCs are due for delivery in 2018-2019”.
Demand
In terms of demand, BIMCO said that “on 10 February 2016, the Baltic Dry Index (BDI) hit 290. At that point, a bulk carrier regardless of its size, age and fuel-efficient qualities earned a time charter average of USD 2,417-2,776 per day. Whereas the three smaller segments have seen higher earnings since then, Capesize earnings lost ground up until the end of March. By mid-April, the gap closed and capesizes are back on par with the pack. Despite the fact that earnings have doubled in those two months, they remain below OPEX levels for the largest part of the fleet. Despite the many attempts by steel mills around the world to fend off Chinese steel from their home market, China’s steel export volumes did not fall significantly in January and February. Export dropped by just 1.6% to 17.85 million tonnes. New data for March showed exports of 10 million tonnes. In 2015, China flooded the world market as 112 million tons were exported, bringing down scrap steel prices in the wake of it.”
It added that “global crude steel production for January and February combined was 5.6% lower than in the same period of 2015, according to Worldsteel. Crude steel production in China was down 6.5% at the same time. The three key items to watch out for in 2016 are Chinese imports of coal and iron ore, as well as how much dry bulk tonnage is going to be demolished. Nothing else really matters to an extent that can either improve or damage the fundamentals of the dry bulk shipping market. In the midst of doom, gloom and uncertainty for shipbuilding, China’s combined imports of the two key commodities in the first two months fared better than we thought. The trouble is, however, that it did not bring decisive support to the freight market. Chinese iron ore imports grew by 6.4% to 155.8 million tonnes over the first two months versus this time a year ago. While coal imports to China fell by 10% to 28.8 million tonnes over the same period. New data for March … all positive. Chinese iron ore imports were 85.8 million tonnes, while coal imports rose to 19.7 million tonnes. The strong coal imports over March all but levelled out the drop in January and February. Q1 coal import growth was down by 1.2% year on year”, BIMCO concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Tuesday, 17 May 16
INDONESIAN COAL PRICE REFERENCE DECLINE AGAIN
COALspot.com: The Indonesia Coal Benchmark Price declined in May 2016.
The Director General of Mineral and Coal of Indonesia, the regulator of ...
Tuesday, 17 May 16
CHINA THERMAL-POWER OVERSUPPLY TO WORSEN - FITCH
COALspot.com: The overcapacity in thermal-power generation in China is likely to worsen in 2016 to 2017, Fitch Ratings says in a new report.
F ...
Tuesday, 17 May 16
ON YOUR MARKS: TRACKING CHINESE TRADE - CLARKSONS
One of the major drivers behind the challenges currently facing many of the shipping markets has been slower demand growth. World seaborne trade gr ...
Monday, 16 May 16
INDONESIAN WEEKLY COAL INDICES AT POSITIVE LEVELS - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.31 percent week over week to averaging $38.94 per ton this past week, shows CS ...
Monday, 16 May 16
OPEC SEES RIVAL OIL PRODUCTION DECLINING
Crude Oil Price Movements
The OPEC Reference Basket averaged $37.86/b in April, a gain of $3.21 or 9.3%. This was 40% higher than the lows reache ...
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- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Minerals Council of Australia
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- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Australian Coal Association
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- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
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- Latin American Coal - Colombia
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- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
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- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
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- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
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