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Monday, 20 March 17
IS THE DRY BULK INDUSTRY STILL ON TRACK FOR PROFITABILITY IN 2019? - PETER SAND
 The industry remains well on target for profitable freight rates in 2019! This relies however, on the projected fleet supply growth rate of 0% in 2017 continuing. The handymax segment may even see profits in 2018 as demand may go beyond 2% in 2017 – before reverting to 2% in 2018 onwards. In 2016, the supply side grew by 3.0% and the demand side grew by 2.4% – measured on a tonnemile basis.
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Overview
This recent lift in freight rates is certainly positive, but there is still work to be done on the supply side. A significant level of demolition activity must be maintained, and increasing focus must also be on keeping slow steaming around. Estimating a return to profitability in the dry bulk industry remains a moving target, and one that differs from one company to the next. But by projecting a course for profitability, everyone in the industry can use it as a reference.
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This resulted in a worsening of the fundamental market balance. However, as the original “Road to Recovery” in May 2016 projected an even worse fundamental deterioration in 2016 – we are today, in a relatively better position than anticipated nine months ago.
BIMCO’s Chief Shipping Analyst Peter Sand comments:
“Estimating a return to profitability in the dry bulk industry remains a moving target, and one that differs from one company to the next. But by projecting a course for profitability, everyone in the industry can use it as a reference.
The fact that the first half of February 2017 was a troublesome period came as no surprise and it makes the strong comeback in the following month stand out as even more remarkable. During that time, the BDI went from 688 to 1,147.
This lift in freight rates is certainly positive, but there is still work to be done on the supply side. A significant level of demolition activity must be maintained, and increasing focus must also be on keeping slow steaming around”.
What has changed?
Besides a relatively better fundamental balance, mostly the daily running costs! The drop in OPEX more than makes up for the fundamental deterioration of the freight market. Speed may also be a factor coming into play as renewed optimism and upwardly moving freight rates are often followed by a less intense focus on maintaining slow steaming.
In total, freight rates will be slightly higher than originally projected for the coming years. Combining the relatively better freight market, with a 10-year-low OPEX level in 2016 – the dry bulk industry remains on the road to recovery.
Even small changes matter
Using the assumptions already mentioned above for the supply and demand side, a further drop in OPEX of 5% will also bring profits for the handysize sector in 2018. This will then mean a justprofitable industry in 2018 overall. However, not profitable for all the sub-sectors, as the panamax and capesize sectors are estimated to remain in the red.
Moreover, a higher supply side growth rate than 0% in 2017, which BIMCO expect to be the case, may not completely wipe out recovery in 2019. As demand is expected above 2% as a target growth in 2017, ‘damage’ from a slip on the supply side is reduced by a stronger demand side.
By: Peter Sand,
Chief Shipping Analyst
BIMCO
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Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
Friday, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
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- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
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