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Monday, 20 March 17
IS THE DRY BULK INDUSTRY STILL ON TRACK FOR PROFITABILITY IN 2019? - PETER SAND
 The industry remains well on target for profitable freight rates in 2019! This relies however, on the projected fleet supply growth rate of 0% in 2017 continuing. The handymax segment may even see profits in 2018 as demand may go beyond 2% in 2017 – before reverting to 2% in 2018 onwards. In 2016, the supply side grew by 3.0% and the demand side grew by 2.4% – measured on a tonnemile basis.
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Overview
This recent lift in freight rates is certainly positive, but there is still work to be done on the supply side. A significant level of demolition activity must be maintained, and increasing focus must also be on keeping slow steaming around. Estimating a return to profitability in the dry bulk industry remains a moving target, and one that differs from one company to the next. But by projecting a course for profitability, everyone in the industry can use it as a reference.
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This resulted in a worsening of the fundamental market balance. However, as the original “Road to Recovery” in May 2016 projected an even worse fundamental deterioration in 2016 – we are today, in a relatively better position than anticipated nine months ago.
BIMCO’s Chief Shipping Analyst Peter Sand comments:
“Estimating a return to profitability in the dry bulk industry remains a moving target, and one that differs from one company to the next. But by projecting a course for profitability, everyone in the industry can use it as a reference.
The fact that the first half of February 2017 was a troublesome period came as no surprise and it makes the strong comeback in the following month stand out as even more remarkable. During that time, the BDI went from 688 to 1,147.
This lift in freight rates is certainly positive, but there is still work to be done on the supply side. A significant level of demolition activity must be maintained, and increasing focus must also be on keeping slow steaming around”.
What has changed?
Besides a relatively better fundamental balance, mostly the daily running costs! The drop in OPEX more than makes up for the fundamental deterioration of the freight market. Speed may also be a factor coming into play as renewed optimism and upwardly moving freight rates are often followed by a less intense focus on maintaining slow steaming.
In total, freight rates will be slightly higher than originally projected for the coming years. Combining the relatively better freight market, with a 10-year-low OPEX level in 2016 – the dry bulk industry remains on the road to recovery.
Even small changes matter
Using the assumptions already mentioned above for the supply and demand side, a further drop in OPEX of 5% will also bring profits for the handysize sector in 2018. This will then mean a justprofitable industry in 2018 overall. However, not profitable for all the sub-sectors, as the panamax and capesize sectors are estimated to remain in the red.
Moreover, a higher supply side growth rate than 0% in 2017, which BIMCO expect to be the case, may not completely wipe out recovery in 2019. As demand is expected above 2% as a target growth in 2017, ‘damage’ from a slip on the supply side is reduced by a stronger demand side.
By: Peter Sand,
Chief Shipping Analyst
BIMCO
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Tuesday, 21 March 17
DESPITE THE CHALLENGING MARKET SITUATION IN 2016 THE DELTA DUNIA MAKMUR HAS ACHIEVED A NET PROFIT OF US$37 MILLION
COALspot.com: PT Delta Dunia Makmur Tbk. has announced its financial results for the period ended December 31, 2016.
Despite challenging marke ...
Tuesday, 21 March 17
JAPAN'S RENEWED COMMITMENT TO COAL - BENJAMIN SPORTON
Japan is one of the largest economies in the world, and has long been a major consumer and importer of energy and a leader in energy technology dev ...
Friday, 17 March 17
U.S WEEKLY COAL OUTPUT VOLUME SLIDES 6.5 PERCENT WEEK OVER WEEK - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 14.7 million short ton ...
Thursday, 16 March 17
CHINA IMPOSING TOUGHER CONTROLS ON LOW-QUALITY COAL IMPORTS
China is ramping up controls on imports of low-quality coal due to concerns about smog and overcapacity in the world’s top coal consumer, a g ...
Thursday, 16 March 17
CAPESIZE: SHOWING STRENGTH; PANAMAX: VERY QUIET - FEARNLEYS
Supramax
The Atlantic market faced less activity from the USG whereas at the Cont tonnage seemed to tighten up with more cargoes emerging. Despit ...
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- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- White Energy Company Limited
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
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