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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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Thursday, 19 March 15
HANDY: INDO COAL CARGOS DESTINED FOR INDIA BEING FIXED IN REGION OF $ 7-8K - FEARNLEYS
Handy
The Handy and Supra market has had a week with mixed signals. Although we see more activity in both hemispheres the rates are only up about ...
Thursday, 19 March 15
INDONESIAN COAL BENCHMARK SOAR 7.69% IN MARCH....!!!
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised up Indonesian coal benchmark prices to US$ 67.76 per MT in March ...
Wednesday, 18 March 15
AVERAGE RATE FOR CAPES MOVED TO BELOW $ 4K/DAY LAST WEEK - INTERMODAL
COALspot.com: The even heavier losses noted in the Capesize segment last week, denied the Dry Bulk market a third weekly positive, while the smalle ...
Wednesday, 18 March 15
PARKING THE CAPES - LINOS KOGEVINAS
It is no secret that recent times have been anything but kind towards shipping, and no sector has suffered more lately than the dry bulk one. While ...
Wednesday, 18 March 15
CHINA-OWNED SHIPS: A RAPID RISE TO BECOME ONE OF THE WORLD'S LARGEST FLEETS - RICHARD SCOTT
Ships operated by owners based in China have become increasingly prominent on the world’s sea routes. China-owned container ships, bulk carri ...
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- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Trasteel International SA, Italy
- PTC India Limited - India
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
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