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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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Wednesday, 18 March 15
Q2 INDONESIAN COAL SWAP DROP 1.45% M-O-M; GAIN 0.63% W-O-W
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and gained week over week.
The Q2 swap fell US$ 0.70 (1.45%) ...
Tuesday, 17 March 15
GAS TO CHALLENGE COAL IN THE ASIAN POWER GENERATION MIX - WOOD MACKENZIE
KNOWLEDGE TO ELEVATE
Wood Mackenzie says that coal is facing increasing competition from gas in the power sector. Coal has dominated as the fu ...
Tuesday, 17 March 15
RIO TINTO PAID US$ 7.1 BILLION IN TAXES IN 2014
COALspot.com: Rio Tinto has published its latest Taxes paid report, detailing the US$7.1 billion in taxes paid by the company around the world in 2 ...
Tuesday, 17 March 15
NEARLY 17% OF US COAL PRODUCTION UNECONOMIC AT CURRENT MARKET PRICING - WOOD MACKENZIE
COALspot.com: Close to 17% of forecast 2015 US coal production is at risk of idling or closure, totalling 162 million short tons (Mst), as these mi ...
Tuesday, 17 March 15
Q3' SA COAL SWAP CLOSED $57.30 PMT W/E 13 MARCH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and gained week on week.
The Q2 swap has fe ...
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- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
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