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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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Monday, 13 January 14
INDONESIAN ORE BAN TO HAVE LIMITED IMPACT ON CHINESE ALUMINIUM PRODUCERS, FITCH RATINGS SAYS
COALspot.com: Fitch Ratings says today that Indonesia's ban on exports of unprocessed mineral ore will have limited impact on Chinese aluminium pro ...
Sunday, 12 January 14
THE FREIGHT MARKET CONTINUE TO REMAIN WEAK NEXT WEEK - SOLYM CARRIERS
Wish You A very Happy New Year
COALspot.com: The market has dropped quite a lot as expected due to holidays and probably also the effect of ban o ...
Friday, 10 January 14
DECISION ON ORE EXPORT BAN WILL BE MADE TOMORROW: INDUSTRY MINISTER, JG SAYS
Industry Minister M.S. Hidayat dismissed reports on Thursday that the government had made a decision on the matter. “We will only make a decis ...
Friday, 10 January 14
US COAL PRODUCTION UP 5.8% ON WEEK IN WEEK ENDED SATURDAY 4 JANUARY
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal in ...
Thursday, 09 January 14
THE INDONESIAN GOVERNMENT EASES ORE EXPORT BAN
COALspot.com: The Indonesian government has finally agreed to ease the ore-export ban just a few days before the Sunday deadline amid protests from ...
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- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- The University of Queensland
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Planning Commission, India
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
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