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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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Friday, 27 December 13
THE EXPORT OF UNPROCESSED MINERALS WOULD NOT BE ALLOWED AFTER 12 JAN 2014 - INDONESIAN ENERGY MINISTER
COALspot.com: The government of Indonesia will implement Law No. 4 of 2009 on Mineral and Coal in full and consistently by January 12, 2014, said, m ...
Friday, 27 December 13
INDONESIA SHIPPED 15.75 PERCENT MORE COAL IN NOVEMBER
COALspot.com: Indonesia, the world's 4th largest coal producer and the largest multi grade coal exporter shipped over $2* billion worth of co ...
Thursday, 26 December 13
COAL & OIL GROUP SECURES US$ 250 MILLION FUNDING FOR ITS 1200MW THERMAL POWER PLANT IN INDIA
COALspot.com: Dubai-based Coal & Oil (C&O) Group has announced that it has secured additional funding of approximately Dhs. 1 billion (appro ...
Wednesday, 25 December 13
DRY BULK INDEX LOST SOME GROUND THIS PAST WEEK - INTERMODAL
Chartering (Wet: Firm+ / Dry: Softer - )
The Dry Bulk Index lost some ground this past week, on the back of activity slowing down befor ...
Wednesday, 25 December 13
SHIPPING : AS FAR AS THIS CYCLE IS CONCERNED, 'WE HAVE SEEN THE WORST....!' - JOHN N. COTZIAS
In a week’s time the year comes to an end. Having been a speaker in two seminars over the past 5 days I was able to see the year ending trends ...
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- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- The University of Queensland
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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