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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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- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Planning Commission, India
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Trasteel International SA, Italy
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
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