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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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Saturday, 07 December 19
SOUTH AFRICAN COAL PRICE SURGE, WHILE OTHERS LANGUISH, IS TROUBLING - REUTERS
Coal prices around the world are gently sliding as demand from top importers such as China, India and even Europe remains subdued amid a so far mil ...
Saturday, 07 December 19
SUPRAMAX: OVERALL, THE BALTIC SUPRAMAX INDEX REMAINED IN POSITIVE MODE, DESPITE SOME AREAS LACKING FRESH ACTIVITY - BALTIC BRIEFING
Capesize
This week the Capesize market maintained healthy earnings, as an end of year surge took the Capesize 5TC back up to $25,202 by mid-wee ...
Friday, 06 December 19
INDONESIA COAL BENCHMARK PRICE FOR DECEMBER INCREASES BY US 3 CENTS MOM
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Thursday, 05 December 19
IMO 2020 IS ABOUT TO GET REAL - GAVIN THOMPSON
As I write this edition of the APAC Energy Buzz from my desk in Singapore I can see ships. Lots of ships. No surprise given that Singapore is among ...
Wednesday, 04 December 19
FITCH RATINGS: CASH FLOW GENERATION TO SLOW DOWN FOR INDONESIAN COAL MINERS
Fitch Ratings' negative outlook on the Indonesian coal-mining sector reflects our view of weaker cash flow generation on account of declining c ...
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- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- PTC India Limited - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- White Energy Company Limited
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- The University of Queensland
- ASAPP Information Group - India
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
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