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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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Tuesday, 03 March 15
Q4' FOB INDONESIA COAL SWAP CLOSED 2% LOWER COMPARED TO Q2 CLOSING PRICE OF $ 47.47
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose month on month and declined week over week.
The Q2 swap increased US$ 2.24 ...
Tuesday, 03 March 15
FOB RICHARDS BAY COAL SWAPS: Q2 UP 9.60%; Q3 UP 9.75% W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and week on week.
The Q2 swap has soared US$ 5 ...
Monday, 02 March 15
CFR SOUTH CHINA COAL SWAP FOR Q2 DELIVERY REACHED $ 57.50 PMT W/E 27 FEB 2015
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.37 (+2.44%) per MT month over month and declined US$ 0.42 ...
Monday, 02 March 15
BORYEONG POWER PLANT OF KOMIPO TO IMPORT 140K OF SUB-BITUMINOUS COAL FOR Q2
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids from coal producers, marketing companies, or traders to supply of 140,000 (70 ...
Monday, 02 March 15
FOB NEWCASTLE COAL SWAP ROSE 6.89% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.35 per MT (+6.89%) month over month and US$ 0.40 (0.78%) week on ...
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- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- The University of Queensland
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- Australian Coal Association
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
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