We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Monday, 30 March 15
WORST IS OVER FOR THE DRY BULK MARKET, BUT THE PAIN WILL REMAIN FOR YEARS TO COME, SAYS BIMCO CHIEF ANALYST - HELLENIC SHIPPING
 The current demise of the dry bulk market isn’t one to go away anytime soon. That doesn’t mean that it can’t improve, with all ship classes expected to cover their operating costs by May. Meanwhile, demolition activity isn’t enough, at least thus far, to offset oversupply of tonnage in the dry bulk market. It’s one of the reasons behind the downfall of the market in the past few months.
In an exclusive interview with Hellenic Shipping News Worldwide, BIMCO’s Chief Shipping Analyst, Mr. Peter Sand, said that the organization expects a fleet growth of 19m DWT for 2015, while already 8m DWT of bulkers have been scrapped. However, the market fundamentals remain negative, despite increasing demand during the current quarter. As Mr. Sand puts it, “we need multiple years of demand outstripping supply to turn the tables. The fact that demand may be fading somewhat now with China in an economical transition phase is not making prospects any better”.
Traditionally, the second quarter of the year signals the rebound of the dry bulk market, at least in terms of demand, with the grain/soya trades of South America kicking in. What’s your estimates about the demand side of the equation in the market going forward?
BIMCO is comfortable that demand for dry bulk ships is improving in Q2 as compared to Q1. Primarily due to increased volumes of soya and iron ore getting seaborne out of South America. Most focus will be on Brazil, with Argentina in a supporting role as soya exporter. It is positive for shipping volumes that Argentina is on track for a record harvest with 5% gathered already and the combined soybean production for Argentina and Brazil, as estimated by USDA, is to hit an all-time high at 150 million tonnes.
Nevertheless, we have to remain patient as regards to increased iron ore exports out of Brazil. In our recently published dry bulk market report we stated that Australia “won the battle” of increased sales to the Chinese in 2014. Additionally, “BIMCO expects that they will not let go of the lead in 2015, at the expense of long-haul shipping demand from Brazil.” Insight provided by Commodore Research & Consultancy supports this view – unfortunately.
For the full year, BIMCO expects demand a bit lower than estimated at the end of 2014. We are currently looking at 3-4% growth down from 4-5%. Key importer, China, is the main culprit behind this revision.
With the market plunging to all-time lows during February, do you think that the worst is behind us? Would you say that this time around, the main reason behind the dry bulk market’s demise is low demand or tonnage oversupply, which was deemed as the main “culprit” in the past?
The pain will stick around for a number of years even though the worst is behind us. The second dry bulk recovery in recent years from the trough in 2012 lasted until the autumn of 2014 where it became apparent how fragile it was. Mostly brought down by overcapacity, but also a tendency that the demand side would not remain as strong as it had been for the past decade or two. Key trigger behind this is of course the decline in coal imports from China, the still lack of nickel ore and bauxite imports and the fact that most importers (excl. China) is still not back at levels reached in 2007-2008!
If you try to look back on the big fleet growth years of 2009-2012, it grew by an annual average of 13.1%. All of those years the overcapacity increased. In 2013-2014, the fleet grew by an annual average of 5.1%, which is much more balanced, but it does not change the fact that the overcapacity is still here. We need multiple years of demand outstripping supply to turn the tables. The fact that demand may be fading somewhat now with China in an economical transition phase is not making prospects any better.
Can India support the market in a few years’ time, much like China did since the early 2000’s?
India is becoming more and more important to the dry bulk market, but they are still not to be seen as “a new China”. The two nations are very different and their development paths not alike. Unleashing the potential of India will be done at slower pace providing a solid level of demand growth going forward.
Given the challenging conditions which have prevailed so far in the market, when do you expect to see rates back above operating expenses, if not for all, at least for the majority of vessels?
BIMCO forecast freight rates for all dry bulk ships to remain below USD 9,000 per day for March-May. The trend is seen up – meaning that they should all be above OPEX cost levels in May. That is if we assume OPEX between USD 4,500 per day for the Handies going up to USD 7,500 for the Capes.
Looking at OPEX alone means Handies, which is making USD 5,766 per day in the current market, and Supras, which is making USD 6,772 per day, is getting OPEX covered. Panamaxes and Capesizes are not.
Beyond OPEX, you need to look at capital costs too. Interests, repayments, and/or depreciations on the fleet often means more to profitability than OPEX does. So in order to be “back into the black” all costs must be covered – freight rates must reach OPEX times two or three, as a rule of thumb, to earn money for supporting a going concern.
How important has the fall in bunker prices been for shipping companies, given the reduction of their operating costs? Would we have seen more bankruptcies in the segment, according to your view?
Cutting the bunker costs in halves is definitely a sizeable cost reduction on the voyage related expenditures. A cost reduction for the one paying for the fuel, that is. So who does that?
Mostly the spot operators working on a USD per tonnes basis, paying the fuel themselves, reap the benefits. So reaping the benefits of a falling cost item is a matter of negation skills too. In case your ship is out on charter, the charterer gets the cost reduction, as the owner is not paying voyage related expenditures. OPEX is only impacted to a minor extent as the price for lubricants may follow the oil price down somewhat.
Will the Capesize segment lead the way “out of the mud” once more?
Without doubt. Why? Because the demand picture as we see at BIMCO is very much biased towards the larger ship sizes of Panamax and Capesizes, whereas the demand situation for the two smaller segments is more slow growing. Bear in mind though that the current drop in rates was also lead by Capes, indicating a “normalized” market condition, but as Capes also took the deepest dive it becomes clear that overcapacity is still significant also for Capesize segment.
In this market environment, which options have ship owners to cut their losses? Out of demolition, slow steaming, or lay ups, which is the preferable choice at the moment?
All options are open, but the only significant one and most widely applied is slow steaming. Fortunately also the most effective one to counterbalance oversupply. Downside however is that is has a temporary nature as compared to demolition of a ship, which has a permanent effect on fleet growth, nominal and actual.
Demolition is also being used as a tool to turn around fortunes. The poor condition of the markets means BIMCO is forecasting total volume of dry bulk ship capacity to go higher than in 2014. Our estimate is 19m DWT for 2015 with some 8m DWT scrapped already.
In terms of investments, have asset prices adjusted accordingly either in the S&P or the newbuilding markets? Is it a good time to invest in modern tonnage, price-wise?
Newbuilding prices have not hit the floor yet; they are still by some distance higher than in 2012. Second hand prices have tumbled the most with all but Capesizes now below the 2012-lows. Capes being on par. Second hand prices has gone down by 40% over the past year, with older ships taking the biggest hits. Is now a time to invest, price-wise? Well, the return on investment seems to be potentially higher elsewhere. Despite many reasons to pick a newbuilt instead of a second hand – the eventual arrival of a more balanced market would all other things being equal be postponed by adding more tonnage to the market without removing the equivalent capacity. Should you be in need of extra tonnage, the market would be better off if those ships are found in the second hand market.
Source: Nikos Roussanoglou, Hellenic Shipping News
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Tuesday, 07 April 15
SUB-BIT FOB INDONESIA COAL SWAP KEEPS DROPPING; DROPPED 2% W-W
COALspot.com: Indonesian coal swap for delivery Q2 2015 declined month on month and week over week.
The Q2 swap was declined US$ 2.44 (5.14%) ...
Tuesday, 07 April 15
Q3 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 55.96 PMT; DOWN 8.40% M-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has declined U ...
Monday, 06 April 15
INDONESIA'S HBA FIXED AT US$ 64.48 PMT FOR APRIL DELIVERY; DOWN 4.84% M-M
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal benchmark prices to US$ 64.48 per MT in Apr ...
Monday, 06 April 15
FOB NEWCASTLE COAL SWAP DECLINED 12% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 6.23 per MT (-12%) month over month and US$ 0.86 (-1.85%) week ...
Monday, 06 April 15
CFR SOUTH CHINA COAL SWAP FALL CONTINUES
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 5.96 (-10.37%) per MT month over month and US$ 0.98 (- ...
|
|
|
Showing 3086 to 3090 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Minerals Council of Australia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
|
| |
| |
|
