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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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- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
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