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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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Wednesday, 19 February 20
MINERS WELCOME INDONESIA'S NEW JOBS BILL THAT COULD SPUR COAL GROWTH - REUTERS
Miners have welcomed proposed changes to Indonesian mining rules under a new law aimed at boosting investment, though critics are concerned that th ...
Wednesday, 19 February 20
AS OCEAN TEMPERATURES RISE, SHIPOWNERS LOOK FOR WAYS TO COPE - WARTSILA
The world is heating up, and its oceans are no exception. According to the International Panel on Climate Change (IPCC), the oceans absorb the majo ...
Wednesday, 19 February 20
MARKET INSIGHT - INTERMODAL
The coronavirus outbreak is estimated to negatively affect global economy by at least EUR400bn this year, representing around the 0.4% of global GD ...
Tuesday, 18 February 20
WEEKLY MARKET ANALYSIS - ALLIED
Under such poorly performing market circumstances, many usually take the historical approach, in order to better understand and further analyze the ...
Tuesday, 18 February 20
ADARO SHIPPED 27 PERCENT OF ITS TOTAL COAL PRODUCTION IN 2019 TO INDIA AND CHINA
PT Adaro Energy Tbk (AE) produced 58.03 Mt of coal from PT Adaro Indonesia (AI), Balangan Coal Companies and Adaro Me ...
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- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- PTC India Limited - India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
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