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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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Thursday, 17 September 15
LOW DEMAND PUSH COAL SWAP DOWN
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and gain week over week.
The 4Q swap declined $ 1.77 (-4.17%) ...
Thursday, 17 September 15
MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
Having experienced, as it was much anticipated, a poor 1st half combined with negative forecasts, summer, in sharp contrast, proved to be more hope ...
Wednesday, 16 September 15
SLOWER GROWTH IN WORLD COAL DEMAND AND LOWER INTERNATIONAL COAL PRICES LED A DECLINE IN INDONESIAN COAL PRODUCTION
COALspot.com: Slower growth in world coal demand particularly China and lower international coal prices have led to a decline in Indonesian coal pr ...
Wednesday, 16 September 15
HIGHER TAXES COULD LEAD GREEK SHIP OWNERS OUT OF THE COUNTRY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
A potential taxation overhaul of the shipping industry in Hellas, which could see the loss of particular tax benefits for ship owners, could lead t ...
Tuesday, 15 September 15
WORLD SEABORNE TRADE: ENTERING INTO A ROLE REVERSAL? - CLARKSONS
Over the past decade, world seaborne trade growth has been dominated by dry bulk and container trade. However, developments in the global economy t ...
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- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- PTC India Limited - India
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
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