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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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Thursday, 05 May 16
DRY BULK MARKET ON REVERSE MODE, AS HOLIDAYS AROUND THE WORLD HURT DEMAND - HELLENIC SHIPPING NEWS
The dry bulk market’s recent rally has been put on a temporary hold, as various holidays around the world have put a stop in it. In its lates ...
Wednesday, 04 May 16
COAL IMPORTS: A VOLATILE MATTER OR STILL POWERING DOWN? - CLARKSONS
Chinese coal imports decreased significantly in 2014-15, and so far in 2016 the pace of decline appears to have slowed, with imports even recording ...
Wednesday, 04 May 16
IS THE DRY BULK MARKET OUT OF THE WOODS YET, OR NOT? - HELLENIC SHIPPING NEWS
Things are beginning to brighten up in the beleaguered dry bulk market, which is riding on a multi-week rally to find itself around the “psyc ...
Wednesday, 04 May 16
POWER - WEEK: REAL EXAMPLES AND CASE STUDIES
POWER WEEK
7 - 11 November 2016, PARKROYAL on Beach Road Hotel, Singapore
www.power-week.com
Overview
Designed for the global e ...
Tuesday, 03 May 16
HOW TO AVOID THE LATEST CARGO FRAUDS - BIMCO
BIMCO receives regular reports from members around the world about cargo fraud. This week alone we have had two reports of cargoes being fixed (or ...
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- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Marubeni Corporation - India
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- The University of Queensland
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
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