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Wednesday, 04 March 15
KEEP CALM AND INVEST IN DRY - THEODORE NTALAKOS
 Keep Calm and Carry On was originally a motivational poster, intended to raise the morale of the British public, produced by the British government in 1939 in preparation for the Second World War. In today's shipping environment where the daily headlines are in the likes of “excess vessel supply continues to weigh on the dry bulk market” and “slower growth in steel output and reduced coal demand contribute to a declining freight rate environment”, we also need all the motivation we can get. Companies’ revenues have declined and many operators are in the red, some are chopping charter rates, we hear about bankruptcies, restructurings and anyone can easily paint a very bleak outlook for the next couple of years.
According to the IMF, global growth in 2014 was 3.3% and in 2015 - 2016 it is projected to be 3.5 and 3.7 percent respectively. It is notable that the 2015-16 projections were revised downwards by 0.3% in October 2014, reflecting the reassessment of prospects in China, Russia, the euro area, and Japan, as well as weaker activity in some major oil exporters because of the sharp drop in oil prices. The United States is the only major economy for which growth projections have been raised.
In January 2014 the dry bulk fleet (over 20,000tons dwt) stood at 8,979 vessels or 697,63million tons deadweight. During 2014 the net growth (deliveries/additions minus demolitions/removals) was 5% in terms of deadweight (a closer proxy to the carrying capacity). Given the fact that there is high correlation between global growth and seaborne trade, unless the GDP growth is higher than the fleet growth, then simply put “the ships are always too many for the cargoes”. With the world growth at 3.3% in 2014 it is evident that the world fleet has been under-utilized and supply has exceeded demand.
In 2015 demolition levels and slippage/cancellations/conversions will be the key. Let’s look at some numbers. The current dry fleet is at 737.65 million tons deadweight while the dry orderbook for 2015 stands at 69million tons deadweight. Assuming that only 80% of this will be delivered (due to slippage, cancellations, conversions etc.) the increase will be 55.2mil tons deadweight. If demolition activity, which has kicked off the year encouragingly, ends up being similar to the levels of 2012, it will be a huge relief valve. In 2012 according to our data about 30million tons dwt was scrapped so if this repeats, the net growth of the fleet will be about 25million tons dwt or 3.4%. This is quite marginal against the projected global growth for 2015 but it may very well signal a balanced supply-demand outlook. So any upside on either the supply (more cancellations, more demolition) or the demand side (the boost to global demand from lower oil prices could be greater than is currently factored into the projections) can reverse the current situation.
The obvious question is if demolition activity can indeed reach 2012 levels. Well, the fleet of ships older than 25 years stands at 29.4mil tonnes i.e. a shade lower than the “required” volume that needs to be scrapped; another 40mil tonnes deadweight are the ships between 20-25 years. In the first two months of 2015, we have already seen much younger vessels sent for scrap. So the relief valve is there and needs to be kept open. Upcoming regulations that will require the shipowners to invest in upgrading their assets will also help in that direction since older assets will not be worth the investment.
So there you have it, there is a quite plausible scenario that can play out this year that can shift things towards the right direction and as long as a series of logical events occur, then we may be looking at a stronger and more balanced 2nd half of 2015. So, Keep Calm and Invest in Dry.
By Theodore Ntalakos
Newbuildings / SnP Broker
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Thursday, 16 April 15
SHIPPING DEMAND TO SUFFER AS CHINESE SLOWDOWN CONFIRMED SAYS BIMCO'S CHIEF SHIPPING ANALYST - BIMCO
The Chinese economy grew by 7.0% y-o-y in the first quarter of 2015, according to National Bureau of Statistics in China. This is the weakest overa ...
Thursday, 16 April 15
INDIA: COAL IMPORTS RISE BY 33 PC TO 240 MT IN FY'15 - PTI
India’s coal imports in the just concluded FY 2015 increased by 33 per cent to about 240 million tonnes.
“Coal import have gone up ...
Thursday, 16 April 15
CAPESIZE: THE SUPPLY AND DEMAND SIDE ARE NOW SUFFERING HEAVILY - FEARNLEYS
Handy
It seems to be some standoff between owners and charterers in both hemispheres this week. Owners are raising their rates while charterers a ...
Thursday, 16 April 15
Q3 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 55.67 PMT
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month.
The Q2 swap has declined US$ 1.90 (3.17%) m ...
Wednesday, 15 April 15
PORT OF NEWCASTLE SHIPPED 13.63 MMT OF COAL IN MARCH; UP 4.41% M-O-M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.227 billi ...
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- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Australian Coal Association
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
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