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Thursday, 18 June 15
DRY BULK SHIPPING: LOWEST FLEET GROWTH IN 10 YEARS MAY NOT PROVE ENOUGH AS DEMAND IS NOT KEEPING PACE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 The demand side of things in the dry bulk market seems unable to keep pace with even the slightest fleet growth, a sign of the demise that the industry is suffering from. According to BIMCO’s latest short-term outlook, the BDI (Baltic Dry Index), started 2015 at 771 points, only to retreat to a historical low of 509 points on the 18th of February. “Since then it has improved but only on a couple of occasions has it been above 600. The market conditions are devastating and volume growth in 2015 on key trades is negative. The lack of coal imports into China is taking centre stage, and lost volumes are difficult to make up elsewhere. The (still) positive iron ore demand is overshadowed in significance as the negative coal market makes headlines”, said the report.
According to BIMCO, “dry bulk is under pressure on the commodity side and since the beginning of 2014 iron ore prices have slid. That development has made some of the mining companies alter their expansion plans of placing more iron ore on the market, when demand is obviously not as strong to uphold the former price level. From USD 140 per ton down to 42 in early April. Since then spot Australian Iron Ore FOB prices (Source: Commodore Research) has improved. By end-May, Australian iron ore (63% iron content) was priced at just above USD 60 per ton. This is very positive as it proves demand is there despite steel production growth being negative in China (-1.7%) as well as rest of the world (-1.9%) during Q1. In 2014, Chinese steel demand contracted for the first time since 1995. As the Chinese economy is now changing, so is its steel demand. The knock-on effect for the dry bulk market will depend on the extent to which imported ore takes market share from domestically mined ore as well as absolute level of steel production. Current forecasts for global iron ore demand growth in 2015 is positive, at 3% (Source: SSY)”, said the report.
Meanwhile, the other significant commodity, coal, is doing really bad in China while improving in India. “Total Chinese coal imports for the first four months in 2015 came in at 68 million tons (Source: Chinese customs). Down by 38% – same period last year. Both thermal and coking coal markets as well as lignite are suffering. The landed cost of coal into China at the end of May is not favouring imports despite very low freight rates. For thermal coal, SSY expects Chinese imports to contract by 30 million tons, while expectations for Indian imports is a plus at 20 million tons. Last year China imported a total of 291 million tons, distributed with 165 million tons of thermal coal, 62 million tons of coking coal and 64 million tons of lignite. These numbers include seaborne as well as land borne imports”, said BIMCO.
In terms of supply, since the turn of the year, the dry bulk fleet as a whole has only grown by 0.5% and since early February, the fleet has not grown at all. This has happened as the demolished volumes have matched the number for newbuildings being delivered. According to BIMCO, “the Capesize fleet is actually smaller today than half a year ago (beginning of November). The development in Panamax and Handysize segment is flat, whereas the Handymax/Supramax segment has grown as we expected it to. In spite of 1 million DWT of Handymax capacity being demolished, 6 million has been delivered, equal to a growth in supply for that sub-segment of 2.9% for the year to date. For the year 2015, BIMCO expects supply growth to be at 3.8%. This is a downward revision of our estimation three months ago, and it rose out of our adjustment of demolition volumes expected for 2015. As the poor freight market bites harder at an extended time, BIMCO anticipates 30 million DWT to leave the fleet during 2015 and 17 million DWT to have been sold for demolition end of May. Owners have dug deep in the first five months of 2015 whilst continued devastating freight market keep demolition volumes high. An improved freight market is expected to cool demolition interests swiftly”.
Additionally, “another positive development is found on the contracting side. 35 new orders have been placed at global shipyards so far this year (1.8 mill. DWT). 7 Panamaxes, 12 Handymaxes, 16 Handysizes and no Capesizes have been added to the order book, which now stands at 1,750 ships with a combined capacity of 142 million DWT. This is to the shocking fact of 1,981 ships which were contracted during 2013-2014″.
In its outlook for the market, BIMCO said that “it is a small consolation that Indian coal imports may go up by 20 million tons, when Chinese imports drop by 30 million tons for the second year running. Despite a very bad sentiment in the market, BIMCO expects volume to increase as we move into Q3. More Brazilian iron ore and grains (wheat and coarse) moving into the market as the soya season abates, should on an overall level, prohibit the market to go into reverse – if volumes contract. The momentous imbalance between supply and demand continues to worsen in spite of a noteworthy 10-year low supply growth rate. 160 million DWT of new orders placed in 2013/14 can only do harm when demolition activity fails to slash any records by a never-seen-before margin. As the demand growth for dry bulk seaborne transportation seems to weaken too, potentially even on a permanent basis as China changes gear, the industry must adapt to become profitable again. Wait-and-see strategies may turn out to take too long. If we are to believe that current utilisation levels are just around 70%, new orders should not just cool down for a while, they must be sensitively counterbalanced with demolition for a number of years, not just a few quarters”.
It concluded its analysis by noting that “for the coming months: June-August, BIMCO expects the market challenges to stick. The demand side is so weak right now, with China reducing coal import by 40% that it dwarfs most of the positive aspects of the market. On the upside we see owners limiting fleet growth by increasing demolition of obsolete tonnage. Whether this work on the supply side will prove to be effective enough to improve the fundamental balance only time will tell”.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Sunday, 21 June 15
SPOT RATE AVERAGES FOR FREIGHT FROM INDONESIA TO INDIA REMAIN STRONG THIS WEEK
COALspot.com: The freight market was quite firm this week compared to last week. The BDI was up 21% week on week and closed at 779 points. The cape ...
Friday, 19 June 15
U.S. WEEKLY COAL PRODUCTION UP SLIGHTLY COMPARED TO LAST WEEK; CONTINUES TO BE DOWN FROM LAST YEAR
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 15.4 million short ...
Friday, 19 June 15
INDONESIA'S COAL-TRAFFICKING PROBLEM REQUIRES IMPARTIAL INQUIRY - JAKARTA GLOBE
Indonesia, the leading supplier to the seaborne thermal coal market, produces 420 million tons of coal per year, according to its official tally.
...
Thursday, 18 June 15
THE FAR EAST HANDYSIZE, HANDYMAX, SUPRAMAX MARKET REMAINED STEADY LAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market closed off on Friday (last week) noting small gains on the back of stronger performance in the Panamax segment, w ...
Thursday, 18 June 15
MERCATOR'S KAMSARMAX FIXED WITH CLEARLAKE
COALspot.com: Mercator Lines (Singapore) Limited, a leading Indian-owned international dry bulk shipping company focused on markets such as India, ...
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- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Minerals Council of Australia
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Interocean Group of Companies - India
- GMR Energy Limited - India
- VISA Power Limited - India
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Planning Commission, India
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
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