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Friday, 28 August 15
DRY BULK SHIP OWNER OPTIMISTIC ABOUT FUTURE PROSPECTS OF THE MARKET: NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Dry bulk ship owner Golden Ocean appeared optimistic on the long term prospects of the dry bulk market, mainly thanks to an expected resolution of the oversupply problems of the market. The owner added in its second quarter report that the average spot rates so far in the third quarter are higher than the rates in the first half of 2015, which means that the company’s revenues are expected to improve compared to the two previous quarters. Golden Ocean noted that following two very weak quarters, the third quarter started with more optimism, in particular, for the Capesize segment. With a spot market close to $20,000 per day it was questionable whether it was a structurally damaged market balance due to oversupply. “Then a three step devaluation by the Chinese Central Bank and a very nervous Chinese stock market removed all signs of optimism over a fortnight. With falling commodity prices and growing uncertainty in general, activity among dry bulk charterers is low at present. Short term this could be painful for owners of dry bulk assets, but in a longer term perspective the supply side should repair itself faster than previously anticipated”, Golden Ocean said.
In any case, according to the shipowner, the dry bulk spot market in the second quarter of 2015 did not give owners of dry bulk vessels any relief. “Rates ended up more or less at similar levels as in the pervious quarter and with limited volatility. According to the Baltic Exchange, average earnings for the Supramax segment were $6,766 per day compared to $6,434 per day in the previous quarter and $8,982 per day in the same quarter last year. Capesize vessels were again facing the lowest earnings with an average of $4,600 per day against $4,582 per day the previous quarter and $11,901 per day in the same quarter last year. Panamaxes earned on average $5,183 per day compared to $4,815 during the first quarter and $6,304 in the same quarter in 2014″.
FLEET SUPPLY
According to Golden Ocean though, the low utilization of the dry bulk fleet the first six months of the year has been due to demand issues rather than increased supply. “Actual deliveries for the first six months amounted to 110 Handysize vessels, 159 Handymaxes/Supramaxes, 88 Panamaxes/Kamsarmaxes and 57 Capesize vessels. During the first half of 2015 less than 27 mdwt were delivered. Even though the delivery rate picked up slightly during the month of July it is unlikely that the delivery ratio will exceed 65 per cent of the official order book this year. At the same time scrapping prior the monsoon season in June/July was beating most analysts’ expectations. For the entire sector above 10,000dwt, 300 vessels have been scrapped. The net effect of this is that after seven months into the year there is still zero net fleet growth for Handysize and Capesize”, said Golden Ocean.
The ship owner added that “historically, limited number of vessels will be delivered during the fourth quarter and in spite of fewer removals due to a combination of improved spot market and lower scrap prices, net fleet growth in 2015 will most likely end up at less than 3 per cent of additional capacity. In aggregate the total order book to fleet ratio fell below 18 per cent at the end of the second quarter, which marks the lowest level since 2003. Still many analysts believe that the official order book is bigger than reality. The positive trend on the supply side is definitely needed due to softer demand for dry bulk commodities”.
DRY BULK DEMAND
In terms of demand, Golden Ocean said in its report that “we witnessed a slight improvement in total demand in the second quarter of the year compared to the previous slow quarter. Measured in tonne miles demand for dry bulk commodities grew by one per cent compared to first quarter, but still one per cent lower than same quarter last year. Uncertainty and conflicting information from the most important country for dry bulk transportation is still making the headlines. The devaluation of the renminbi by the Chinese Central Bank took many by surprise. It is not expected that this will have a significant impact on import levels. Compared to the average exchange rate in January this year, the currency is trading 4 per cent lower while the average spot price for iron ore is 15 per cent lower than the January average price. Chinese steel consumption (observed) was 4.3 per cent lower in the second quarter compared to the same quarter last year, but increased by 3.5 per cent compared to the previous quarter. Chinese iron ore imports for the first half the year ended at 453 million mt, followed by a strong 86 million mt in July. This is 15 per cent up from previous month and the highest monthly import figure seen in 2015. It is interesting to note that iron ore inventories remain at relatively low levels and almost 30 million mt lower than same time last year. Australia and Brazil continue taking market share from marginal producers and are up 30 million and 10 million tons, respectively, in the first seven months of 2015. New capacity from both countries is expected to be made available in the coming months represented by Roy Hill in Australia and new production from Vale. Coal imports to China continue to be the most negative contributor to dry bulk demand and are 34 per cent lower year-on-year for the first seven months of 2015. July showed a similar uptick in imports as for iron ore and for the last few weeks Chinas southwestern regions received less rain than usual. As a consequence hydro power production in July fell for the first time since October 2013. Given that China imports only six per cent of the coal it consumes, the sensitivity and uncertainty is substantial. Limited new hydro power capacity will be introduced over the next five years. India’s growth in coal imports is steady, but at a slower pace last two months. In the first half of 2015, the country imported 120 million mt which is almost 30 million mt more than the same period previous year”, Golden Ocean noted.
Ship prices
The soft freight market continued to put downward pressure on asset values for all vessel classes during the second quarter. According to industry sources, prices fell by 7.5 percent to 12.5 percent depending on the country of construction. Asset prices have reacted positively so far in third quarter to the improved spot market freight environment and most analysts are of the opinion that the industry has seen the bottom in this cycle”, the shipowner concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Monday, 28 September 15
CAPESIZE FLEET INCREASES BY JUST 1 VESSEL DURING LAST 12 MONTHS, IN POSITIVE SIGN FOR DRY BULK SHIPPING MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
After a rather tumultuous period, the shipping industry and more particular the dry bulk market has started to adjust to the new realities of globa ...
Monday, 28 September 15
Q1'16 CFR SOUTH CHINA COAL SWAP ROSE 2.73 PER CENT M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery moved upward US$ 1.45 (3.04 %) per ton month over month.
A commodity ...
Sunday, 27 September 15
THE PANAMAX INDEX FELL 1.19 PCT WEEK OVER WEEK
COALspot.com: The BDI closed Friday (25/09/2015) at 943 points, down by 17 points compared to previous Friday closing (18/09/2015). The BDI wa ...
Friday, 25 September 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING SEPTEMBER 19 ROSE 2.5% PER CENT W-W
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.8 million shor ...
Wednesday, 23 September 15
CAPESIZE: SPOT RATES HAVE INCREASED MORE THAN 70 PER CENT DURING LAST WEEK
Dry Bulk owners, always look at September as the time that the market “signals” what lies ahead for the remainder of the year. The Chin ...
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- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Agrawal Coal Company - India
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- Semirara Mining and Power Corporation, Philippines
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- Planning Commission, India
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- Chamber of Mines of South Africa
- The University of Queensland
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- Orica Australia Pty. Ltd.
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- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
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- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
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- Interocean Group of Companies - India
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- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
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- Renaissance Capital - South Africa
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- San Jose City I Power Corp, Philippines
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- Romanian Commodities Exchange
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- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Minerals Council of Australia
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- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
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- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
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- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
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- Asia Pacific Energy Resources Ventures Inc, Philippines
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