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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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Wednesday, 11 May 16
MARKET INSIGHT - KATERINA RESTIS
On Saturday 7th May, Riyadh replaced the long-serving oil minister of more than two decades, Ali-Al-Naimi, as part of a major government overhaul, ...
Tuesday, 10 May 16
VOLATILITY? VARIATION NO ENIGMA TO SHIPPING..... - CLARKSONS
Along with cyclicality, the other characteristic of the shipping markets which receives frequent mention is volatility. This is so evident that the ...
Monday, 09 May 16
INDONESIAN CS COAL INDICES UP CONTINUES; POSITIVE DIRECTION
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.10 percent week over week to averaging $38.82 per ton on this past Wednesday, a ...
Monday, 09 May 16
BALTIC DRY INDEX ENDS WEEK ON A NEGATIVE NOTE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week.
The freight market was weak and a ...
Friday, 06 May 16
U.S. WEEKLY COAL PRODUCTION UP 9 PERCENT W/W; DOWN 35.3 PERCENT Y/Y - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.3 million short to ...
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- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- The University of Queensland
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
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