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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, 13 December 13
DRY BULK SHIPPING TO WITNESS HEALTHY DEMAND MOVING FORWARD - ICS
The Institute of Chartered Shipbrokers Greek Branch organised its 9th Annual Forum at Eugenides Foundation, on Wednesday, 11th of December, with a r ...
Friday, 13 December 13
US PRODUCED APPROXIMATELY 18.4 MILLION SHORT TONS OF COAL W/E 7 DECEMBER 2013
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.4 million short tons (mmst) of coal in ...
Thursday, 12 December 13
GREAT EXPECTATIONS SANCTIONED - EVA TZIMA
News that sanctions on Iranian oil exports could be lifted sometime in the following months have shaken the markets recently. One of the world&rsquo ...
Thursday, 12 December 13
DRY BULK MARKET RATES FOR CAPESIZES TO REMAIN VOLATILE SAYS BIMCO
The dry bulk market has reached multi year highs this week, as the BDI is standing at the 2,300-point mark. In its analysis of the market, BIMCO pre ...
Wednesday, 11 December 13
THE INDONESIAN GOVERNMENT IS CONSIDERING SETTING A REGULATION ON THE MINIMUM PURITY TO REGULATE UNPROCESSED ORE BAN
COALspot.com: Energy and Mineral Resources Minister Jero Wacik recently proposed to house those mining (mineral) companies that had shown a commitme ...
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- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- White Energy Company Limited
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
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