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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, 07 September 15
CFR SOUTH CHINA COAL SWAPS ROSE 1.1 PER CENT WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.52 (3 %) per MT month over month.
A commodity sw ...
Sunday, 06 September 15
AUTOMATION AND TECHNOLOGY IS CERTAINLY PART OF THE SOLUTION FOR IMPROVING PERFORMANCE AND EFFICIENCY TO MAKE THE MINE OPERATIONS MORE PROFITABLE, HOWEVER............ - LUKE JALSEVAC
"The Technology and Innovation in Mining 2015" production team at Information Exchange Group interviewed Luke Jalsevac, Director, Busines ...
Sunday, 06 September 15
THE CAPE SIZE INDEX ROSE 10.83 PER CENT WEEK OVER WEEK
COALspot.com: The BDI, the Baltic exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, declined o ...
Saturday, 05 September 15
DRY BULK MARKET MAY SUFFER NOW, BUT IS BOUND FOR A RECOVERY THANKS TO A LIMITED FUTURE FLEET GROWTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The slow increase of dry bulk tonnage growth this year could turn into a solid indicator of the market’s future prospects. According to a rec ...
Friday, 04 September 15
U.S. COAL PRODUCTION FOR THE W/E AUGUST 29, UP SLIGHTLY; FALL 4.5 PERCENT Y-Y: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.7 million shor ...
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- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- The University of Queensland
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
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