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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.
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Tuesday, 24 March 15
A WEAK WEEK FOR FOB INDONESIA COAL SWAP
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and week over week.
The Q2 swap fell US$ 2.48 (5.12%) month ...
Tuesday, 24 March 15
RICHARDS BAY COAL SWAP FOR DELIVERY Q2 CLOSED $ 1.87 HIGHER COMPARED TO Q3 CLOSING PRICE
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has dropped U ...
Tuesday, 24 March 15
ARGUS MEDITERRANEAN SOLID FUELS 2015 CONFERENCE | 2-3 JUNE, ISTANBUL
Press Release: Argus Media is proud to announce Argus Mediterranean Solid Fuels, which will be held in Istanbul,on 2-3February.
Argus produces ...
Monday, 23 March 15
IS OIL GETTING READY TO PLUNGE BELOW $40? - FORBES
KNOWLEDGE TO ELEVATE
In my last crude oil market update in late-February, I expressed my skepticism toward the oil price rebound. Since then, ...
Monday, 23 March 15
Q4' 2015 FOB NEWCASTLE COAL SWAPS DECLINED 6.79% M-O-M; 2.55% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 3.42 per MT (-6.33%) month over month and US$ 1.37 (-2.77%) we ...
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- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- The University of Queensland
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
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