We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Monday, 24 February 14
DRY BULK MARKET TO IMPROVE OVER THE COURSE OF 2014, BUT OVERSUPPLY STILL AN ISSUE SAYS BIMCO'S CHIEF SHIPPING ANALYST
As a gruelling first quarter edges closer to the end, dry bulk ship owners are looking at an improved second quarter demand, which, coupled with slow steaming and other cost saving measures, will lead to the market's rebound. Speaking with Hellenic Shipping News Worldwide in an exclusive interview, BIMCO's Chief Shipping Analyst, Mr. Peter Sand, noted that lower freight rates over the first couple of months of 2014, were to be expected, but as 2014 moves forward, things will begin to improve. "On the average freight rates levels we have already seen 2013 was better than 2012. BIMCO expect 2014 to become better than 2013 in that sense", Sand said. But, oversupply is still an issue, while demolition activity is expected to be lower this year, on the back of improved freight rates.
Since the start of 2014, dry bulk rates have plunged close to the level they were prior to last year's rally. Is this development attributed solely on low seasonal demand, or have there been other factors in play as well?
The development in dry bulk rates are more or less in line with BIMCO expectations as expressed in our recent reports on the shipping market. The combination of the strongest Q4 ever on record and the recurring seasonal low demand in Q1 multiplied by the weakness in demand during Chinese New Year always test the market with a downward correction. Sometimes high volatility results in rates undershooting when a new lower balance is settling in, this time around is not much different but the rebound is not likely to be especially strong in the short run as can also be seen in the freight rates forecasts that BIMCO has released in early-February for the coming two months.
How crucial has been slow steaming to helping sustain freight rates?
Slow steaming is a very vital tool in today’s markets. Without that, the full force of oversupply would weight heavy on the rates, causing miserable returns on investments.
Most recently, the combination of a slower pace of newbuilding tonnage flowing into the market and widely applied slow steaming has lifted earnings.
The way back to an improved utilization of the fleet is paved with patience and “supply management”. The latter includes keeping slow steaming around, continue the scrapping of the less efficient part of the fleet, making retrofits/repairs works now rather than later, an carefully considering the future expansion of the fleet.
In this sense, it is important to remember that slow steaming has a larger impact on the supply side as compared to demolition, but the temporary nature of slow steaming makes it all more volatile as the market conditions improve.
In its recent report, BIMCO reiterated its view that, beginning April and throughout the remainder of the year, the dry bulk market's prospects are rosier, at least demand-wise. Why is this?
A lot of seasonality plays into this forecast. If you e.g. look at exports of iron ore out of Brazil and Australia the pace and volumes increase throughout the year as it progresses – with Q1 being the low quarter. Demand for steam coal and iron ore is expected to rebound during Q2. Moreover, BIMCO do not expect the support from grains to kick in before we enter Q3 and Q4. This is how we expect 2014 will play out on the big scale.
Do you expect the recovery scenario to fully materialize over the course of the year, in terms of freight rate levels and how sustainable will this rebound be?
We see a winding and potentially long road back to a fully sustainable market where the fleet is once again steaming at “new normal” service speed also on the ballast legs to some extent. Our “new normal” service speed is one that is lower than the norm of the past decade – due to higher bunker costs, increased fuel efficiency and the fact that slow steaming is applied whenever possible. But the way back also holds many “windows of opportunity” where rates will firm and spike as demand picks up strongly or weather-related factors lend a hand.
On the average freight rates levels we have already seen 2013 was better than 2012. BIMCO expect 2014 to become better than 2013 in that sense. But as we are only just about to see the demand side outstripping the supply side, following multiple years of the opposite, the fundamental market balance is also likely only to improve slowly and bring around higher levels of fleet utilization. Going forward BIMCO expect higher volatility as the market get tighter.
Is the supply overhang alleviated at the moment, compared to a year ago?
We have to consider slow steaming an integral part of our industry to handle the oversupply and improve industry economics. The overhang has come down over the past half year, but we still estimate oversupply of 20-25%.
Are you worried about the level of newbuilding ordering over the past year, a dynamic which has spilled over into 2014, even more aggressively?
As regards to the placing of new orders, I am confident that the individual industry players knows exactly what they are doing. Nevertheless, if you look at it from a pure industry point of view you could argue that if there is an overhang of capacity you should scrap more vessels than enters into the active fleet in order to bring back a balance – but that’s not how it works.
In terms of demolition activity we've seen a drop over the past few months, as owners found it more financially wise to retain or resell their older vessels. Will this trend change, or will we see a substantial drop over the course of 2014, thus offsetting the rise in demand?
There is no real big surprise in the recent development and we rely on the trend to go on. BIMCO expect 14m DWT to be scrapped in 2014, this a drop of 33% as compared to 2013. When rates go up – fewer chose to cut capacity. The increased in secondhand prices too, spells it out – a resale is much more likely than a sale to cash buyer. It also tells us that more buyers than sellers are in the market now. This is pushing prices up. Different types of ships, in size, gear, draft and operational capabilities simple cater for different demand. This is why ships are not sold for demolition due to the age criteria only.
Taking into account the aforementioned development in terms of tonnage supply, do you think that the projected recovery this year could be shortlived, or is there "enough gas in the tank", to see the market up the hills of 2015 and 2016 newbuilding deliveries?
Our supply forecast for 2014 and 2015 certainly looks manageable. Any additional new orders can still absorbed by yards for 2016-2017 delivery without jeopardizing the recovery. BIMCO do not see the improving trend derailed by anything that we can see in the market today. Only unforeseen major game changers can do that. Even though China is slowing down and transforming its economy toward a higher dependency on services (rather than manufacturing) and private consumption, we trust a soft landing will continue to support the dry bulk market.
Will the market ever shake the effect of China in cargo demand, at least offset it, through the rise of other countries in dry bulk trade? If so, which countries could those be?
China is the elephant in the dry bulk room. The wise buyer of commodities at the right prices and heavy weight player providing the market with massive amounts of demand. China means the world to dry bulk shipping and the nation holds the key to a strong market going forward. We have not seen a single nation being so dominant in the global market before and I doubt we will see something like this duplicated in the near term perhaps never. It is natural to mention India in this context, as the nation holds a giant potential as an importer but also as an exporter of dry bulk commodities. However, it would be premature to compare the two nations today to forecast the development of India, as they are fundamentally very different.
Source: Nikos Roussanoglou, Hellenic Shipping News
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Sunday, 26 January 14
FREIGHT RATES FALL FURTHER ON LACK OF CARGOES - SOLYM CARRIERS
COALspot.com: The freight market has continued to soften further this week with BDI down by 12.31 pct. BDI was closed at 1,246 points week ended 24 ...
Friday, 24 January 14
US COAL PRODUCTION UP 3.9% ON WEEK IN WEEK ENDED SATURDAY - EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.1 million short tons (mmst) of coal in ...
Friday, 24 January 14
DRY BULK MARKET STRUGGLING TO FIND FIRM FOOTING IN START OF 2014 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been faltering since the start of 2014, struggling to hold its ground as low seasonal demand has hindered further growth in ...
Thursday, 23 January 14
PANAMAX : THIS WEEK THE ACTIVITY CAME DOWN DRAMATICALLY - FEARNRESEARCH
Handy
With the Chinese New Year approaching the activity and rate levels are sliding in both hemispheres. Rates in the Atlantic have knocked off so ...
Thursday, 23 January 14
30 DAYS LEFT TO REGISTER FOR PACIFIC BASIN COAL CONFERENCE
COALspot.com: (Press Release) : IHS Inc. (NYSE: IHS), the leading global source of information and analysis, will host the Pacific Basin Coal Confer ...
|
|
|
Showing 3886 to 3890 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Economic Council, Georgia
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- The University of Queensland
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
|
| |
| |
|
