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