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Wednesday, 01 January 14
DRY BULK CARRIER OWNERS ANTICIPATING AN EVEN STRONGER 2014 YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
To begin with, The Hellenic Shipping News Worldwide team would like to wish you all a Happy and Prosperous 2014! We begin the New Year with our first analysis on the dry bulk market. The dry bulk market managed to reach multi year highs over 2013, with the final fourth months of the year, reminiscing of a healthier market. The Baltic Dry Index (BDI) ended the year near its higher point since the 2008 crisis and this is a clear indication of things to come, provided that ship owners don't succumb to the same mistakes of over ordering, like they did last time around.
Newbuilding wise, 2013 proved to be a record breaking year since 2008, but then again, this can be attributed, mostly, on the ship owners' attempt to lower the average cost of their fleet, by investing on newbuilding vessels which come at a much lower price than their 2007-2008 counterparts. As such, and with prices rising again, we cxpect that 2014 will probably not be that "hot", unless of course the pace of freight rates' increase is even higher. In that case, owners could be tempted to continue their newbuilding ordering spree.
In its latest analysis of the market, BIMCO predicted that in the coming weeks, the elevated level of Capesize Time Charter average rates will remain volatile and stay around USD 15,000-30,000 per day. Panamax TC average rates will stay in the region of USD 9,000-16,000 per day. For the Supramax segment, BIMCO forecasts freight rates in the USD 11,000-17,000 per day interval, whereas Handysize rates is expected to stay strong in the region of USD 9,000-12,000 per day.
According to the relative report, BIMCO noted that 2013 was a truly amazing year for Chinese iron ore imports. "A growth rate of 10.8% for the first 11 months as compared to the same period last year is solid. Evident also from the freight rate development in the Capesize market, the last 5 months have been exceptional, with 17.8% y-o-y growth for July-November. On top of that, coal imports (not all seaborne) have grown by 15.7% in January-October compared to the same period last year. As we move into a seasonally stronger part of the year for bulk trades, the November and December indications that are already visible point towards more strong numbers.
So far, we have not recorded any major impact on demand due to the announced 3% Chinese import tax on low calorific coal that should be in place now. Indonesia is expected to be affected by this to some extent, as almost all lignite imports into China originate from Indonesia".
It added that "as regards freight rates, the smaller segments of Handysize and Supramax have enjoyed an almost unbroken run of better earnings over a sustained period. Both segments are propelled forward by a strong Atlantic market, mainly driven by front-haul routes out of the US Gulf to Continental Europe and the North Coast of South America, mostly carrying grain.
Not since the middle of last year have we seen average Handysize rates above USD 10,000 per day. For Supramax, the stronger demand has meant average freight rates have gone from USD 10,000 per day to USD 15,000 per day. The 6-month TC rate has also gone up, indicating that the market does not believe this strength is about to instantly evaporate.
However, it will not last for very long if we use the same argument and look at the 1 and 3 year TC rates that have barely moved. When looking at Capesize TC rates, six months deals in the period market were quoted at USD 31,000 in September. As the market fell back during October to stabilise at the USD 15-20,000 per day interval during November, the breakaway in the short period market was neutralised. At the end of November, TC rates, regardless of duration, stood at the same level – indicating uncertainty about the future direction. FFA rates, on the other hand, are not quite as optimistic, but equally volatile when offering around USD 13,000 for a Q1-2014 contract in early December", BIMCO's analysts stated.
Supply
Meanwhile, in terms of tonnage supply, BIMCO said that "the fleet has now grown by 5.3% (55 million DWT) in 2013 with a further 7 million DWT still set for delivery in 2013. This means the full year fleet growth could hit 6% as the higher freight market has limited demolition activity. Since 1 July, just 6.3 million DWT has left the active fleet on that account.
Fleet growth in the Capesize segment has been going steeply South since the middle of last year, where the segment growth during the previous year reached 20%. Since then, the slow inflow of new tonnage in 2013 has left Capesize fleet growth at just 5% in October 2013. Panamax has been the fastest growing segment in 2013, but at a significantly lower peak level than the Capesize segment. It is more positive now for the Handysize segment, which has seen the fleet decrease in size this year as the demolition of 5.5 million DWT has offset the delivery of 5.3 million DWT.
The slowing trend in fleet growth will continue into next year and has not been wiped out completely by the hefty ordering activity we have witnessed in past two months – 136 new ships with a capacity of 13.3 million DWT. Amongst them were 20 VLOCs, 16 Capesizes and 24 Handysizes. Year-to-date contracting activity stand at 63.2 million DWT, this is on course to become higher for the full year than the combined bulk carrier contracting activity during 2011-2012" it said.
Outlook
For 2014, BIMCO expects that demand growth will range between 4½ and 6%, indicating that such strong growth will outstrip supply and bring about an improvement to the fundamental balance. According to BIMCO's head of shipping analysis, Peter Sand, "coal exports from the US have been growing since 2007. However, after a record-setting year in 2012, the numbers appear to be dwindling. Even though March this year set a record with 12.3 million tons, 7% higher than the record set in June 2012, it is not representative of the whole year. The exported total in the first nine months of 2013 is 7.5%, lower than that of the same time last year. Seen on a broader scale, however, the 2013 numbers are still around 100% higher than they were only 4 years ago. In combination with the long sailing distances that most US coal export routes hold, the trade has established itself as a key element in the market, also in the future" he said.
As such, "in the light of lower domestic demand for coal in the US due to the excess production of cheap gas, BIMCO expects US coal producers to become a mainstay in the Atlantic market. Down the road, we may also see coal exports from US West Coast ports.
Going forward, EIA expect US coal exports to remain elevated in 2014 too. Driven by the increased consumption of gas within the US at the expense of coal, producers opt for exporting to Europe and Asia. However, productions costs in the US require relatively high sales prices, and with coal being abundant, particularly in the Asian region, the potential seems to be capped for the near-term future. Despite slower Chinese GDP growth in 2014, commodity imports could very well stay strong. This is due to the factors of diversity in suppliers, lower commodity prices, and the lower quality of domestically produced iron ore and thermal coal", the report concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Friday, 17 January 14
DRY BULK MARKET ENDS DECLINE, BOUNCES BACK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's been a rough start to the New Year for the dry bulk market, which was supposed to be on the verge of rallying to new heights this year, on the ...
Friday, 17 January 14
SPOT COAL PRICE TRENDS IN US VARY ACROSS KEY BASINS DURING 2013, SAYS EIA
COALspot.com: Spot steam coal price trends in US varied across key basins in 2013, a latest EIA report says. Compared with 2012, while total coal de ...
Thursday, 16 January 14
PANAMAX : THE GAP BETWEEN SPOT AND PERIOD HAS INCREASED IN BOTH HEMISPHERES - FEARNRESEARCH
Handy
In the Atlantic we have seen rates slowly sliding on lack of enough fresh business. USG/Continent still paying excess 28k and seems on an upw ...
Thursday, 16 January 14
SHIP OWNERS SCRAP 1,119 SHIPS DURING 2013 ON THE BACK OF OVERSUPPLY ISSUES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Scrapping of older vessels is still the best bet that ship owners can make, in order to improve their newer vessels' fortunes, amid an oversupply o ...
Wednesday, 15 January 14
KOREA MIDLAND POWER CO INVITES BIDS FOR 360K MT OF SUB-BITUMINOUS COAL FOR ITS BORYEONG PLANT
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 360,000 Metric Tons (MT) of sub-bituminous ...
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- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Planning Commission, India
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Indian Energy Exchange, India
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Australian Coal Association
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Bhatia International Limited - India
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