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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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Tuesday, 24 December 13
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS UP 11.46% W-W
COALspot.com: In the week ended December 23, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.84 ...
Tuesday, 24 December 13
SGX HAS LAUNCHED FREIGHT FUTURES
COALspot.com: Singapore Exchange (SGX) has announced the launch of freight future yesterday.
According to SGX’s press release, SGX has laun ...
Monday, 23 December 13
API 8 CFR SOUTH CHINA COAL SWAP FOR AVERAGE Q1' 14 CLOSED AT $ 82.80
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 2.97 percept month on month as on Friday 20 December 2013. ...
Sunday, 22 December 13
Q1' 14 DELIVERY COAL SWAPS CLOSING HIGH COMPARED TO Q4' 14 DELIVERY CLOSING
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery gained $ 1.31 pmt month on month on Friday 20 December 2013 ...
Sunday, 22 December 13
QUIET FREIGHT MARKET DUE TO LONG HOLIDAYS
COALspot.com: The market was soft this week with all indices down. However towards second half of the week the futures on segments was firming up.
...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- CNBM International Corporation - China
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Planning Commission, India
- PTC India Limited - India
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Australian Coal Association
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Bhatia International Limited - India
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