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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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Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
Sunday, 15 February 15
BALTIC DRY INDEX CONTINUALLY DIPPED IN RED
COALspot.com: The Baltic Dry Index continues its decline and fell 5.18 pct to 530 points week on week due to falling commodity prices and declining ...
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- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
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