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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 economic regions’ notable fiscal policies aimed at stimulating growth, there is still no full-blown and self-sustainable economic recovery. For the second quarter of 2013, Europe recorded the first positive GDP growth numbers in eighteen months, a healthy contrast to the previous double-dip recession of earlier quarters. However, rising unemployment, particularly among young people, continue to be the main concern of the euro-zone policy makers.
With a projected growth in the US GDP of 2.6%, the quantitative easing programme of the US Central Bank continues to be the vital ingredient to uphold the country’s positive momentum; there is little will or ability by Congress to exercise other effective fiscal policies.
In Asia, the world’s second and third largest economies provide added comfort for solid international shipping demand in 2014. China is on track for a softer landing with GDP growth at 7.3%, while Japan is driven forward by a determined effort labelled “Abenomics” that is set out to boost the country’s monetary base, bringing back inflation and lifting GDP.
The distribution of economic growth is set to shift in favour of demand driven by advanced economies. This will affect individual shipping segments differently.
In short, the signs of recovery continue, however fragile they may seem. IMF expects 2014 GDP and world import volume growth to hit a three-year high at 3.6% and 4.8% respectively. Europe will crawl away from the abyss bringing with it slightly higher demand for containerships and tankers. The driver in the US will be strong private demand and increased domestic oil production. This should benefit containerships and product tankers.
Growth in emerging market and developing economies is expected to remain strong at 5.1% in 2014, supported by solid domestic demand, recovering exports, and supportive fiscal, monetary and financial conditions. Generally a positive sign for all shipping sectors.
Supply: Will the excessive ordering postpone the recovery?
All the main shipping segments remain heavy on the supply side, causing great volatility in freight rates. Fortunately, the industry has now improved its ability to apply counter-balancing measures to such a degree that even the most oversupplied sectors may experience periodic healthy earnings.
Looking at the newbuilding market developments during 2013, yards aspiring to fill capacity continued to tempt owners with low prices and with some success. With the high cost of fuel, shipowners’ quest for more fuel-efficient or eco tonnage continues to be the main motivator, filling berths and driving newbuilding prices upwards. There appears to be no scarcity of capital for what investors may see as healthy business, but the traditional bank lending has declined and new sources of capital made their entry into the market such as private equity and debt investors.
Tonnage demand in 2013 turned out a bit weaker than initially expected, however, on the supply side the fleet continued to outweigh demand across all segments. 2014 is likely to see a change for the better, as the pace of deliveries slows down, perhaps except for product tankers.
Looking forward to 2014, BIMCO expects the dry bulk fleet to grow by 4.4% [2013E:5.9%] as both deliveries and recycling activity cool off. For the tankers, we expect the dirty segment to grow by 2.9% [2013E:2.3%] negatively affected by small recycling volumes whereas the clean sector will touch a 4-year high at 4.0% [2013E:3.2%]. Supply growth in the containership segment is estimated at 5.7% [2013E:5.9%].
Dry Bulk: Improving fundamentals as demand outstrips supply growth
BIMCO expects dry bulk demand to grow at 4.5 to 6%, driven forward by the major bulk trades: iron ore, steam coal and coking coal, with grain in a supporting role. China remains in the driving seat, a scenario that will benefit the larger ships more than the smaller ones.
Following a rather uneventful first half of 2013, July and August were on fire, one that raged through September and October bringing Capesize rates north of USD 42,000 per day. Expanding Chinese steel production and restocking of iron ore were at the centre of the action.
In 2014 and beyond, the economic and social progress in the main developing nations that seek inexpensive energy and prosperity will set the tone and affect shipping demand positively.
Volatility is likely to rise as the market balance improves. Positive demand shocks will benefit owners and operators to a higher extent than in previous years. The significant oversupply of dry bulk tonnage will, however, influence the pace of the recovery as will the deliveries that follow on from the many newbuilding contracts signed during 2013.
Tanker: The US oil story develops
An uninspiring crude tanker market throughout most of 2013 was fortunately disrupted by an unexpectedly rally in VLCC freight rates during the final quarter.
In the product tanker market, expectations strengthen for this to be the first shipping segment to recover from the market downturn. 2014 is set for stronger demand growth than seen in 2013, but the year will also bring about a larger fleet to cater for expected growth in demand. Having said that, the fundamentals appear to have improved during 2013 although this has yet to be reflected in the freight rates.
Most of the changes to the established, well-known tanker trade routes stem from the fast-track changes in the US domestic oil market. Traditional front-haul routes into the US have reversed as more oil products are now exported.
For patient participants in the crude oil tanker market, the question will be whether China’s aim to diversify its sources of oil supply in favour of West Africa and South America, can offset the tonne-mile losses from the US lowering its long-haul imports. A quick calculation show that for every barrel of crude oil lost from the Arabian Gulf to the US, we need two extra barrels to head for the Far East in order to prevent a reduction in tonne-mile demand.
Container: Moving forward on a knife’s edge
Volatility in freight rates is driven by a full-focused drive towards enhanced competitiveness by lowering unit costs through economies of scale. This is inducing carriers to deploy increasingly large vessels throughout their networks to optimise services.
The two significant spot freight rate hikes on the Shanghai to Europe trade lane during the second half of 2013 proved the point that balancing deployed tonnage to demand can bring sustainable earnings around – at least for a short while. For 2014, carriers are likely to bring tonnage into service while walking on a knife’s edge trying to balance the freight market.
The highest demand growth is seen on the smaller trades; the North-South trades in particular. The pulse on intra-Asia trades is beating fastest of all as ASEAN economic activity strengthens and picks up pace.
Going forward the charter markets will continue to suffer from the high volatility in the sector. Pressure stems from extensive cascading of tonnage and general oversupply. We expect this trend to ease somewhat in 2014, with the return of growth in volumes throughout the year, including the main-lanes, where better economic conditions will prevail in Europe alongside those in the US.
Source: BIMCO / Hellenic Shipping News
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Sunday, 05 January 14
API 8 CFR SOUTH CHINA COAL SWAP FOR Q3 DELIVERY CLOSED $ 80.05, A $ 0.90 LOWER THAN Q1 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 1.40 percept day on day closed at US$ 80.95 per mt as o ...
Sunday, 05 January 14
CENTRAL BUREAU OF INVESTIGATION OF INDIA REGISTERS CASES IN CONNECTION WITH ALLEGED SUPPLY OF LOW QUALITY INDONESIAN COAL BY A PRIVATE COMPANY TO NTPC & NSPCL
COALspot.com: The Central Bureau of Investigation of India has registered two cases regarding alleged supply of low quality imported Indonesian coal ...
Saturday, 04 January 14
THE INDONESIAN GOVERNMENT TO DOWNSIZE ITS COAL PRODUCTION TARGET TO 400 MMT THIS YEAR
COALspot.com: Indonesia to downsize its coal production target to 400 million tons in 2014, lower than the production in 2013, which stood at 421 mi ...
Friday, 03 January 14
IN 2013 RBCT HAS, FOR THE FIRST TIME, EXPORTED MORE THAN 70 MILLION TONS OF COAL
COALspot.com: South Africa's Richards Bay coal terminal, the world’s largest single coal exporting terminal shipped 6.788 million tonnes of c ...
Wednesday, 01 January 14
COAL & OIL TO SET UP ANOTHER 1,600 MW POWER PLANT IN INDIA - VENKATARAMANI
COALspot.com: Dubai-based Coal & Oil (C&O) Group is planning to make additional investment of around US$ 1.61 billion to set up 1,600 mega w ...
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- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- The University of Queensland
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
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