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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, 05 January 15
CFR SOUTH CHINA COAL SWAPS GAINED WEEK OVER WEEK, SGX DATA SHOWS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 2.50 (-4.02%) month over month and gained US$ 0.20 ( ...
Monday, 05 January 15
FIVE ENERGY SURPRISES FOR 2015: THE POSSIBLE AND THE IMPROBABLE - KURT COBB
The coming year is likely to be as full of surprises in the field of energy as 2014 was. We just don't know which surprises! I am not predictin ...
Monday, 05 January 15
API 5 FOB NEWCASTLE COAL SWAP FOR Q1'15 DELIVERY CLOSED US$ 0.45 HIGHER COMPARED TO Q2'15 CLOSING
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 0.60 per MT (-1.15%) month over month and gained US$ 0.02 (+0.04%) ...
Sunday, 04 January 15
BALTIC DRY INDEX CONTINUES ITS DECLINE IN 2015
Wish you all a very Happy New Year 2015. The last report was dated 19th Dec 2014 and due to Christmas and new year holidays no reports were publish ...
Saturday, 03 January 15
U.S WEEKLY COAL PRODUCTION FELL 11.2% TO 17.6 MMST WEEK OVER WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.6 million short tons (mmst) of coal ...
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- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Minerals Council of Australia
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Australian Coal Association
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Planning Commission, India
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
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