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Wednesday, 08 January 14
DRY BULK MARKET PROSPECTS LOOKING BRIGHTER DESPITE SLOW START TO THE NEW YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market's benchmark, the BDI has been on a fall since the start of 2014, ending yesterday's session down to 1,876 points, experts indicate that it's only a matter of time, before a new freight rate rally emerges. After all, the first quarter of each is traditionally the slowest one for the dry bulk market. Among the encouraging signs for the market, emerged by a recent analysis from the world's leading shipbroker and research firm, Clarksons which noted that on 2011-13, total iron ore tonne-mile trade is projected to have grown on average by 5% p.a., and Chinese imports are expected to have accounted for around 60% of the expansion. More recently the second half of 2013 has seen a significant uptick in tonne-mile imports into China. These trends highlight several key drivers.
According to Clarksons, "Chinese steel production has been the most significant influence on global iron ore trade. In October 2013, global steel output totalled 134mt, up 7% y-o-y and 27% since October 2007. In the year to date, China’s steel output made up 49% of the global total. Chinese steel output has driven China’s ore tonne-mile imports, which are projected to have risen 10% p.a. on average in 2011-13 to reach close to 3,400bn tonne-miles in the year to date. The Graph of the Month shows a pick-up in ore tonne-mile imports in 2H 2013, with firm Chinese steel output growth of 13% y-o-y in September. However, steel output is not the only driver. In 2012, China’s output growth fell to around 4%, while ore imports grew 9% to 724mt; low ore prices made the price differential between domestic and international ore more favourable for imports".
Meanwhile, "outside China, steel output growth has generally been falling since 2011, and weak economic conditions in the EU led to a lower out-put. This caused a 4% fall in iron ore imports by the EU in both 2011 and 2012 (to 116mt). However, recently, steel output outside China has improved, and rose 5% y-o-y in October. The beginning of improved economic performance in the EU is expected this year to drive growth in iron ore imports by the EU for the first time since 2009, with imports now projected to grow 4% in full year 2013", the shipbroker noted.
It added that "the supply side is also a significant driver, and its seasonality often has an impact. Weather related issues can limit exports from Australia and Brazil early in the year. Whilst Brazil’s ore exports have grown only slightly in recent years, the long-haul nature of Brazil-China trade often drives tonne-mile import growth later in the year. Seasonal fluctuations led to an 11% q-o-q fall in Chinese tonne-mile imports in Q1 2013. Average Chinese imports from Brazil in August and September were 16% higher than the average in 1H 2013, which drove a Chinese ore import peak to 378bn tonne-miles in Sep-tember.
Of course, in the longer-term tonne-mile trends are also affected by the pattern of iron ore mine expansions. Since 2011, China’s tonne-mile import growth has largely been driven by a 46% growth in short-haul Australian exports. However, by the end of the decade, iron ore tonne-mile trade growth looks increasingly likely to be driven by the ramp up of mining projects further away in Brazil.
So, China’s steel output growth is the critical factor driving iron ore tonne-mile trends. However, other influences, and supply side developments in particular, can clearly be highly significant too", Clarksons concluded.
In a separate analysis, "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.
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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Thursday, 09 January 14
CAPESIZE: WEST AUSTRALIA FREIGHT IS NOW DOWN IN THE $8S AND STILL DROPPING - FEARNLEYS
Handy
In the Atlantic we see rates sliding slowly for the start of 2014. Several players cvrd over the holidays and the rate decline was som ...
Thursday, 09 January 14
THE SHIPPING MARKET IN 2013 AND LOOKING FORWARD GLOBAL ECONOMY: STEADY AS SHE GOES UPWARDS - BIMCO
Over the past year, developed economies have gained traction while developing and emerging economies have suffered from slower growth. Despite key e ...
Wednesday, 08 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS FALL
COALspot.com: In the week ended January 6, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.27 m ...
Wednesday, 08 January 14
THE DRY BULK MARKET HAS LOST SOME OF ITS STEAM THESE PAST COUPLE OF DAYS: INTERMODAL
Chartering (Wet: Softer- / Dry: Softer- )
The Dry Bulk market has lost some of its steam these past couple of days although hires, espe ...
Wednesday, 08 January 14
SHIPPING: THE ABSOLUTE BOTTOM OF THE CYCLE WAS REACHED AND PASSED - GEORGE LAZARIDIS
COALspot.com: To many in the industry 2013 has been the turning point in the market where the absolute bottom of the cycle was reached and passed.
...
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- Semirara Mining Corp, Philippines
- Australian Coal Association
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- The University of Queensland
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- White Energy Company Limited
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
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