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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, 01 January 14
COAL & OIL TO SET UP ANOTHER 1,600 MW POWER PLANT IN INDIA - VENKATARAMANI
COALspot.com: Dubai-based Coal & Oil (C&O) Group is planning to make additional investment of around US$ 1.61 billion to set up 1,600 mega w ...
Tuesday, 31 December 13
INDONESIA'S COAL PRODUCTION COULD HIT 450 MMT IN 2014 - ICMA
COALspot.com: Indonesia, the fourth largest coal producer and largest coal exporter in the world, to increase coal output in year 2014 instead of th ...
Tuesday, 31 December 13
U.S. COAL PRODUCTION INCREASED WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.5 million short tons (mmst) of coal in ...
Tuesday, 31 December 13
MORE THAN $21 BILLION INVESTED IN SECOND HAND SHIP PURCHASES IN 2013
One thing that was apparent in the sale and purchasing markets during 2013 was the ship owners' larger appetite for vessel acquisitions, as most so ...
Monday, 30 December 13
INDONESIAN COAL TO BE PART OF INDEX DETERMINING POWER TARIFFS - BUSINESS STANDARD
In a significant move, power sector regulator CERC has decided to provide 50 per cent weightage for Indonesian coal in the benchmark index that is u ...
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- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Planning Commission, India
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- The University of Queensland
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Minerals Council of Australia
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
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