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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, 16 November 19
LIFE AFTER FOSSIL FUELS: THE DAYS OF OIL AND COAL TRANSPORTATION ARE NUMBERED - BALTIC EXCHANGE
With the world fiercely focused on a decarbonised future, fossil fuel movers and traders might rightly be reconsidering their future. But cast a wi ...
Saturday, 16 November 19
OIL MARKET REPORT: PAUSING TO REFLECT - IEA
Global oil demand in 3Q19 increased by 1.1 mb/d year-on-year (y-o-y), more than double the 435 kb/d seen in 2Q19. China’s demand increased by ...
Friday, 15 November 19
RISING ENERGY DEMAND IN SOUTHEAST ASIA TO BE MET AND SUPPORTED BY COAL - WORLD COAL
Last week the International Energy Agency (IEA) released its semi-annual Southeast Asia Energy Outlook report which outlines the latest insights in ...
Thursday, 14 November 19
EIA EXPECTS U.S. STEAM COAL EXPORTS TO FACE INCREASING COMPETITION FROM EASTERN EUROPEAN SOURCES
EIA expects total U.S. coal production in 2019 to total 698 million short tons (MMst), an 8% decrease from the 2018 level of 756 MMst. The decline ...
Wednesday, 13 November 19
INDONESIAN NOVEMBER COAL PRICE REFERENCE LOGS FIRST GAIN SINCE AUGUST
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
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- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- ASAPP Information Group - India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Australian Coal Association
- Kumho Petrochemical, South Korea
- The University of Queensland
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
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