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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, 17 December 13
NEWCASTLE COAL EXPORTS UP 37.83% WEEK ON WEEK
COALspot.com: In the week ended December 16, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.45 ...
Monday, 16 December 13
SUB-BIT FOB INDONESIA COAL SWAP LOST $ 0.53 IN A WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery gained $ 0.91 pmt month on month on Friday 13 December 2013 ...
Monday, 16 December 13
API 8 CFR SOUTH CHINA COAL Q3' 14 DELIVERY PRICE CLOSED $1.63 LESSER THAN Q1' 14 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 5.34 percept month on month as on Friday 13 December 2013. ...
Sunday, 15 December 13
SUPRAMAX'S FREIGHT RALLY COMES TO AN END THIS WEEK
COALspot.com: The BDI was up by 7 pct closing at 2,330 points week on week and the cape index was also up by 10.51 points and closed at 4,246 points ...
Friday, 13 December 13
HARD COAL : VOLUMES POSSIBLY AT RECORD-BREAKING HIGH; PRICES POSSIBLY AT A RECORD-BREAKING LOW - VDKI
Press Release : World Hard Coal Market 2013: volumes possibly at record-breaking high, prices possibly at a record-breaking low. German and UK impor ...
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- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
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