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Monday, 05 January 15
THE SHIPPING MARKET IN 2014 AND LOOKING FORWARD - BIMCO
 2014 started with plenty of optimism for a considerably better global economy and an improved shipping market. Things turned out somewhat differently. Adverse weather conditions in the US during winter were the dominant factor, creating a difficult first half of the year for the global economy. The developing and emerging markets continued on a downward trend, while a sunnier outlook from the US and Europe had the effect of moving the already more advanced economies forward.
The quantitative easing programme of the US Central Bank has now ended. This is a landmark in terms of recovery. Following a quadrupling of the US monetary base, unemployment has come down, the stock market has gone up and economic growth has become more robust. The UK has followed the same path as the US, with similar results. This is outstanding in the otherwise sluggish European economic development.
In Japan, “Abenomics” is facing headwinds caused by a hike in sales taxes and a subsequent return to recession. Japan’s economy has been stagnating for decades, and it is unlikely to move much further forward from this in 2015.
The slowing of the Chinese economy is adding uncertainty to the level of shipping demand generated in the Far East. Its soft landing seems to incur turbulence, with some indicators suggesting the official GDP data may not give us the full story.
Growth in emerging markets and developing economies is set for a comeback in 2015, with GDP-growth improving from 4.4% in 2014 to 5.0% in 2015. The advanced economies are likely to stay on the recovery track, and improve their GDP-growth to 2.3% in 2015 (1.8% in 2014). The common challenges remain poor inflation expectations, a lack of structural reforms and lack of job creation. There is clearly room for more political initiatives in 2015 to support the global economy.
Supply: A stalling orderbook means reality has hit home
The total orderbook remained unchanged during 2014. This signals that the industry is now realising that more new orders may not be the right thing to do after all.
The fundamental oversupply of capacity in all of the major shipping segments has not changed much over the past year. A higher level of demand has only just matched the net supply of new tonnage coming on stream.
Crude oil tankers are the only exception to the general status quo in the balance of freight markets. A multi-year low inflow of new crude oil tankers has stimulated earnings growth of some 20% compared to 2013. Meanwhile, the growing supply pressure in product tankers neutralised most of the growing demand side, with earnings coming in just a little shy of 2013.
Container ships keep getting bigger, breaking previous size records for both individual ships and the average size across the fleet. The CSCL Globe, with a capacity of 19,000 TEU, was launched in November, and the average TEU capacity of a 2014-newbuild increased to 7,400 TEU, up from 6,600 TEU in 2013. Next year the scheduled average is 8,000 TEU.
Looking forward to 2015, BIMCO expects the dry bulk fleet to have found a new “normal” level of supply side growth, expanding by 5.1% (5.5% in 2014). Regrettably, the level is still too high to reduce the glut of ships in the market. For tankers, BIMCO expects the dirty segment to grow by 1.7% (1.3% in 2014). Three years of low supply growth has led to more positive short-term prospects for crude oil tankers. In the clean segment, the estimated supply growth for 2015 is 4.6% (4.3% in 2014). Supply growth in the container ship segment is expected to drop to 5.8% in 2015 (6.2% in 2014).
Dry Bulk: New challenges await as demand slows down
BIMCO expects dry bulk demand to slow in 2015 to a rate of 4-5%. Iron ore demand will again be the centre of attention. In recent years, demand growth has been biased heavily towards the Capesize segment. In 2014, 70% of the total volume growth came from increased iron ore demand driven by China. BIMCO expects this trend to continue, with Capesizes outperforming the smaller sizes relatively.
The strong iron ore demand in 2014 was somewhat neutralised by weaker coal demand from China. Meanwhile, the Indonesian ban on exports of unprocessed bauxite and nickel ore resulted in a weak Supramax market in the Far East.
Towards the end of the year, the late arrival of strong exports of iron ore out of Brazil proved to be insufficient to deliver on the promise of 2013, when rates for all segments went up. While earnings had hit the floor in 2012, BIMCO expected 2014 to build on the optimism of 2013 and continue on the road to recovery. That did not materialise.
Tanker: what is the “new normal” demand level?
The crude oil tanker market started 2014 on a very positive note, with a five-year-high for earnings in the first quarter. The market’s strength showed clearly in early autumn and in the current winter market. The export of crude oil from West Africa has shifted from West to East as the US has reduced its imports to almost zero. This has given the demand side momentum, as West Africa now export more to the Far East, creating many more ton-miles.
For product tankers, the final quarter of 2014 contrasts greatly with the dull and flat market we have seen for most of the year. Despite US oil product export growth slowing down, it remains a positive story overall. Demand growth just managed to match supply growth, as the positive events arrived late in the year for the shipping market as well as in global economics.
Falling oil prices stirred some positive unrest in the tanker market, with rising tonnage demand in their wake. In spite of the price drop arising from weak oil demand and oversupply in the market, the current low and volatile commodity price is good for trading and shipping.
With a dramatic fall in bunker prices, it is vital for a continued industry recovery that all shipping segments resist higher speeds. Failure to do so may compromise improvement of the fundamental balance, which is essential to bring prosperity back.
Container: Will strong demand and slow steaming remain?
Strong demand growth on the large-volume trades from Far East to US and Europe has brought lower volatility in freight rates on key trades while re-activating most of the previously idle ships.
However, during peak season, the steep drop in freight rates on the Far East to Europe trade lane made it clear that the utmost care is constantly required for the supply side, while the introduction of ever-larger ships continues.
Improved industry earnings currently rest on one central requirement: slow steaming and defence of individual market share. This highly competitive market only returns a positive margin if the cost base is extremely low.
BIMCO expects containership supply to continue to grow at its “new normal” level of around 6%, making the demand side a focal point. European demand has been stronger than private consumption figures indicated, and we may well see further improvement for US demand. The US East Coast could build further on a remarkable year as the ports prepare for the imminent arrival of ultra-large container ships. Enlargement projects in the Panama Canal and Suez Canal will further influence the deployment of ships.
Source: BIMCO | Hellenic Shipping
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Monday, 12 January 15
SHIPPING - CHALLENGES AND RESOLUTIONS - EVA TZIMA
Last year has without a doubt been another challenging one both for both our industry and our country. As Greece is currently dominated by election ...
Sunday, 11 January 15
BDI DECLINED 8% ON WEEK; BCI LOST 31%
COALspot.com: The BDI continued its decline in the first week of this year or lost 8 pct week over week. The BDI was closed at 709 points whi ...
Friday, 09 January 15
U.S. EASTERN SPOT STEAM COAL PRICES FELL IN 2014; ROSE IN WEST - EIA
U.S. Eastern spot steam coal prices declined in 2014 compared to 2013 levels because of a decline in steam coal exports.
According to U.S. Ene ...
Friday, 09 January 15
WEEKLY U.S. COAL PRODUCTION UP AN ESTIMATED 2.2% Y-O-Y
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.6 million short tons (mmst) of coal ...
Thursday, 08 January 15
INDONESIA PRESSES ON WITH HIGHER COAL ROYALTY FEE TO BOOST STATE REVENUE - JG
The Indonesian government is pressing on with its plan to raise the royalty charged to coal miners in order to increase state revenue, but the move ...
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- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- MS Steel International - UAE
- Minerals Council of Australia
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- PTC India Limited - India
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
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