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Saturday, 21 December 19
SHIPPING'S SUPPLY AND DEMAND TRENDING OFF BALANCE - BIMCO
 One of the most worrying trends that has developed recently – which will affect shipping demand in the years to come – is the falling trade-to-GDP ratio.
The falling ratio can be explained by slowing globalistation as well as increasing protectionist measures being implemented around the world, spear headed by the US. The raised barriers to trade are here to stay as we enter a new decade, with the shipping industry stuck with the consequences.
The trade war is the clearest example of these extra barriers to trade, and although a phase 1 deal was reached in December, the most difficult issues have yet to be addressed, and BIMCO therefore expects the trade war to continue to plague shipping between the US and China in 2020. Unfortunately, they are not the only countries engaging in tariff wars. The EU also faces additional tariffs from the US and we see trade tensions between Japan and South Korea.
The effects of the worsening of the fundamental shipping market balances this year will be felt in 2020, as the balance is not reset to zero when the calendar year changes. BIMCO continues to warn that the worsening balance between the supply of ships and the demand will be detrimental to shipowners’ ability to pass on the additional costs associated with compliance of the new IMO 2020 Sulphur Cap. It will depend on the freight rates to which extent the additional costs are covered, which in turn depend on the market conditions; the better the market, the easier it is to pass costs on.
Dry Bulk shipping
The biggest concern for Capesize shipping in 2020 is the trend in China, where iron ore imports may fall for the third year in a row. The structural change in China’s steel production, towards using scrap steel in favour of imported iron ore, means that Chinese demand for iron ore can no longer be counted on to increase demand for Capesize ships, with imports having peaked in 2017.
For the dry bulk shipping industry there is more bad news from China. Its soya bean imports have become an important part of the trade war and how it is viewed, but even aside from the trade war, the outlook for soya bean trades into China are weak. Its demand will be considerably lower due to the largest ever culling of pigs which consume most of China’s soya bean imports. It will take years for the Chinese pig population to return to the same size as before the cull, and even then, lowering the soya content in pig’s feed will have lasting consequences on these trades.
The high fleet growth in 2019 (4.1%) will play out into 2020 when the fleet is also expected to grow by more than demand. The cumulative impact of these growth rates mean that the gap between demand for shipping and the supply of ships will continue to grow, putting pressure on freight rates throughout the year.
Tanker Shipping
Crude oil tankers have certainly been in the headlines in 2019 due to geopolitical developments and as freight rates reached record levels as a result, but going into 2020, the fundamentals remain unchanged. This means that after the seasonal boost fades away in the first quarter, the high freight rates in the VLCC-market are likely to disappear, as the market fundamentals have in fact worsened in 2019, with an eight year high fleet growth of 6.3%.
Fleet growth has also been high in the oil product tanker market, with many owners aiming to benefit from the IMO 2020 Sulphur Cap and the boost that BIMCO expects it will bring to the oil product tanker shipping industry. The boost are on the back of the new trades for the transport of compliant bunker fuels from the refineries to the bunkering ports.
While this boost will improve tanker earnings in the first 3-6 months of 2020, once the short term boost will fade away, the challenge facing the market is that the new ships will still be around , and will instead be fighting for cargoes in an already over-supplied market.
One of the major developments expected in 2020 is for the US to become a net exporter of crude oil on an annual basis. The increasing proportion of global crude oil exports coming from the US is good news for the tanker industry as this involves longer sailing distances to the Far East, where the major importers are, compared to exports from the Middle East.
Source: Peter Sand, Chief Shipping Analyst, BIMCO
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Monday, 24 February 20
CHINA SAYS MAJOR COAL FIRMS RESTORE 95% OF PRODUCTION CAPACITY - REUTERS
China’s coal companies controlled by the central government have resumed operations and are back at more than 95% of their capacity, an offic ...
Sunday, 23 February 20
SHIPPING INDUSTRY FACES $370 MILLION HIT FROM NEW PANAMA CANAL CHARGE - REUTERS
A new “freshwater” charge that came in this month to help the Panama Canal cope with climate change will cost the shipping industry up ...
Sunday, 23 February 20
A 57,000DWT SHIP FIXING DELIVERY SOUTH KALIMANTAN TRIP, REDELIVERY CJK, AT $7,600 - BALTIC BRIEFING
Capesize
The Capesize market found little to cheer about this week as it again endured remarkable lows. The Atlantic continued to improve, with ...
Saturday, 22 February 20
THE SURPRISING MOVE IN MARINE FUEL SPREADS - ING
Middle distillates tank
One of the biggest surprises since the implementation of new International Maritime Organization (IMO) sulphur regulati ...
Friday, 21 February 20
CAPE: AVERAGE NOMINAL DAILY EARNINGS STILL ADMITTEDLY UNCHANGED W-O-W AT BELOW US$3000 - FEARNLEYS
CAPE
The worst may just about be over for the big ships. Average nominal daily earnings still admittedly unchanged w-o-w at below US$3k, but sent ...
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- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Central Electricity Authority - India
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- The University of Queensland
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
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