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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, 06 January 14
INDONESIAN COAL SWAPS SLIDE TO $ 61.25 FOR Q4' 14 DELIVERY
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.32 pmt month on month on Friday 3 January 2014. Th ...
Sunday, 05 January 14
API 8 CFR SOUTH CHINA COAL SWAP FOR Q3 DELIVERY CLOSED $ 80.05, A $ 0.90 LOWER THAN Q1 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 1.40 percept day on day closed at US$ 80.95 per mt as o ...
Sunday, 05 January 14
CENTRAL BUREAU OF INVESTIGATION OF INDIA REGISTERS CASES IN CONNECTION WITH ALLEGED SUPPLY OF LOW QUALITY INDONESIAN COAL BY A PRIVATE COMPANY TO NTPC & NSPCL
COALspot.com: The Central Bureau of Investigation of India has registered two cases regarding alleged supply of low quality imported Indonesian coal ...
Saturday, 04 January 14
THE INDONESIAN GOVERNMENT TO DOWNSIZE ITS COAL PRODUCTION TARGET TO 400 MMT THIS YEAR
COALspot.com: Indonesia to downsize its coal production target to 400 million tons in 2014, lower than the production in 2013, which stood at 421 mi ...
Friday, 03 January 14
IN 2013 RBCT HAS, FOR THE FIRST TIME, EXPORTED MORE THAN 70 MILLION TONS OF COAL
COALspot.com: South Africa's Richards Bay coal terminal, the world’s largest single coal exporting terminal shipped 6.788 million tonnes of c ...
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- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- PTC India Limited - India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- The University of Queensland
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
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