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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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Tuesday, 14 January 20
MABUX: BUNKER MARKET THIS MORNING, JAN.14
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) changed insignificant and i ...
Tuesday, 14 January 20
SHIPPING MARKET ANALYSIS - ALLIED SHIPBROKING
Uncertainty in the global geopolitical sphere seems to have not come to an end along with 2019, as 2020 commenced with renewed tensions between the ...
Tuesday, 14 January 20
DRY BULK MARKET: "THIS IS NOT THE END OF COAL" SAYS IEA - BALTIC EXCHANGE
A historic drop in coal-fired electricity generation will not sway global coal demand from its upward trajectory through to 2024, though growth wil ...
Saturday, 11 January 20
ARE YOU 95% CONFIDENT THAT YOUR VERY LOW SULPHUR FUEL IS ON SPEC AND MARPOL COMPLIANT? - GARD
KNOWLEDGE TO ELEVATE
Bunker fuel is a commodity and, like all commodities, is produced and sold according to specifications. Bunkers are usual ...
Saturday, 11 January 20
NEW PRICING COULD SPELL TROUBLE FOR CHINA'S COAL SECTOR - CHINA DIALOGUE
Benchmark coal tariffs have been the foundation of China’s electricity pricing since 2004 but this mechanism was replaced on January 1 with a ...
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- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
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- Wilmar Investment Holdings
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- Petrochimia International Co. Ltd.- Taiwan
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- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- VISA Power Limited - India
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- Indian Oil Corporation Limited
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- Deloitte Consulting - India
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- Planning Commission, India
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- Kohat Cement Company Ltd. - Pakistan
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- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
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- Economic Council, Georgia
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- Chettinad Cement Corporation Ltd - India
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- Indian Energy Exchange, India
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- Vedanta Resources Plc - India
- White Energy Company Limited
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- AsiaOL BioFuels Corp., Philippines
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- Merrill Lynch Commodities Europe
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- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- The University of Queensland
- CNBM International Corporation - China
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
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- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
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- Thai Mozambique Logistica
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- Australian Commodity Traders Exchange
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- Global Green Power PLC Corporation, Philippines
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- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
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- IEA Clean Coal Centre - UK
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- Sindya Power Generating Company Private Ltd
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- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Australian Coal Association
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
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- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
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