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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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Wednesday, 07 January 15
FUEL EFFICIENT SHIPS MAKE LESS SENSE IN LOWER BUNKER PRICE MARKET, BUT FUEL COSTS ARE BOUND TO RISE AGAIN
The shipping industry entered 2015 on mixed emotions, as a relatively buoyant tanker market is met by a rather lackluster dry bulk market. Still, a ...
Wednesday, 07 January 15
2015 IS RIDDLED WITH CHALLENGES FOR THE SHIPPING SECTOR, MOST NOTABLY THE DRY BULK MARKET - HELLENIC SHIPPING NEWS
As the new year has now set foot for real, many are still looking to detect what’s in store for the various shipping markets, with the first ...
Tuesday, 06 January 15
SHIPPING MUST ADOPT CAN-DO ATTITUDE IN 2015 - MOORE STEPHENS
Shipping needs to adopt a can-do attitude in order to successfully meet the challenges which are likely to come its way in 2015.
Shipping part ...
Tuesday, 06 January 15
Q4' 15 FOB INDONESIA COAL SWAP CLOSED 1.81% HIGHER COMPARED TO Q1' 15 CLOSING
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 0.74 (-1.51%) m ...
Tuesday, 06 January 15
FOB RICHARDS BAY COAL SWAPS LOST W-O-W AND M-O-M, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.52 (-5. ...
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- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
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