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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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Wednesday, 25 February 15
PORT OF NEWCASTLE SHIPPED 13.16MT OF COAL IN JANUARY; DECLINED 16.70% FROM A MONTH AGO
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.15 billio ...
Wednesday, 25 February 15
BDI SLIPPING ONCE MORE TO FRESH HISTORICAL LOWS
COALspot.com: With the BDI slipping once more to fresh historical lows and the Chinese holidays underway, signs for a positive reversal in the Dry ...
Tuesday, 24 February 15
FOB INDONESIA COAL SWAP SET TO RALLY
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap increased US$ 3.30 (+7.30%) ...
Tuesday, 24 February 15
Q3' FOB RICHARDS BAY COAL SWAP CLOSED $59.80 W/E 20 FEB
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and decline week on week.
The Q2 swap has soar ...
Tuesday, 24 February 15
IHS ENERGY COAL CONFERENCE OF THE AMERICAS
Attend the IHS Energy Coal Conference of the Americas 17-19 March in Cartagena, Colombia and learn about timely concerns in today's coal indust ...
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- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
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