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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, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
Thursday, 05 March 15
BUKIT ASAM BOOKED US$ 1 BILLION REVENUE IN 2014
COALspot.com: Indonesian publicly listed and state owned coal miner PT. Bukit Asam, has announced that, the revenue of the company for the period J ...
Wednesday, 04 March 15
AN AGENDA FOR CHANGE - FITCH INDONESIA CONFERENCE
Fitch Indonesia Conference - 5 March 2015
Fitch Ratings will host its annual Indonesia conference on 5 March 2015.
The theme of this year ...
Tuesday, 03 March 15
INDONESIAN COAL EXPORT VOLUME TO DECLINE 50% BY 2019
COALspot.com: The Indonesian government is planning to reduce coal export volume by 50% within the next five years while keeping its coal productio ...
Tuesday, 03 March 15
INDIAN THERMAL COAL IMPORTS: STEAMING FORWARD - CLARKSONS
Coal-fired power stations comprise around 60% of India’s power output, and with domestic supply issues and favourable international coal pric ...
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- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- The University of Queensland
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
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