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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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Wednesday, 15 January 14
CFR SOUTH CHINA COAL SWAPS FALL BY 6.57% MONTH ON MONTH
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 6.57 percept month on month and closed at US$ 78.90 per mt as ...
Wednesday, 15 January 14
INDONESIAN MINING LAW AVERTS BOP PRESSURE, RISKS REMAIN, FITCH SAYS
The last-minute intervention at the weekend by Indonesia's politicians to avert a significant disruption of mining activity and exports, should lim ...
Wednesday, 15 January 14
Q3 AND Q4 INDONESIAN COAL SWAPS DECLINE MONTH ON MONTH
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 1.23 pmt month on month on Friday 10 January 2014. T ...
Wednesday, 15 January 14
PANAMAX: PACIFIC - REMAINED QUIET; ATLANTIC - CONTINUED THEIR RETREAT
COALspot.com: The holiday hangover seems well underway for the Dry Bulk market that saw more ground being lost this past week. The BDI has closed of ...
Tuesday, 14 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS FALL 18.28 %
COALspot.com: In the week ended January 13, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2.67 ...
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- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Minerals Council of Australia
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Coal and Oil Company - UAE
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
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