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Monday, 12 October 15
DRY BULK SHIPPING: MARKETS ARE SLOWLY IMPROVING FROM A VERY LOW LEVEL AS THE DEMAND SIDE FALTERS - HELLENIC SHIPPING NEWS
 The dry bulk market is in the midst of a shift in demand patterns, which coupled with a tonnage supply overhang, has been facing headwinds over the past few years. In its latest short-term outlook, BIMCO noted that “when traditional demand growth is not increasing, we need to look harder for future growth. Here the glut of high-iron-content ore in the international markets and the following low prices may finally bring around a sizeable substitution in consumption by Chinese steel mills, away from the domestically produced low-iron-content ore, in favour of imports”.
“Calculations done by BIMCO show that monthly imports into China could be 20mt higher per month (+26%). A total of an extra 240 million tons on an annual basis could bring deployment for around 155 Capesizes, assuming an unchanged distribution between Australian and Brazilian imports (75%/25%). Last year, Australia grew its share significantly as 90% of Chinese incremental demand came from Australia.
As Brazilian miner Vale is expecting to grow its output over the next year, this would improve the prospects. Working against would be more Brazilian ore transported on 400,000-DWT Valemax class ships operated by the miner itself or related parties”, BIMCO noted in its report.
As such, it concludes that “for the coming months: September-November, BIMCO expects the supply of new ships to stay subdued and slow paced towards the end of the year. The deteriorating demand-side conditions are expected to be somewhat reversed as we move into the stronger months of the year. The vital commodities, coal and iron ore, are both expected to be in higher demand in coming months, enhancing owners’ and operators’ opportunities to find employment for their ships. Altogether this should support the freight rates although no large-scale improvement to the fundamental balance is likely to develop”.
According to BIMCO’s Chief Shipping Analyst, Peter Sand, “the shipping market and underlying profitability can only improve if the fundamental conditions (supply and demand) also improve. Therefore transportation of larger volumes, longer sailing distances in general or a lower increase of dry-bulk fleet size is a prerequisite for better markets to arrive. On the first issue about more commodities, we have seen coal as the primary culprit so far, with grains potentially also sinking into the red before the end of the year. Volumes of steam coal and coking coal are both contracting notably, and our forecast is for an annual decline in transport driven by the lack of demand from China (-51 million mt) in the East and the UK (-13mt) in the West cushioned by increased appetite for imported steam coal in India (+16mt). Prospects for the latter have declined somewhat over the summer as domestic production and power-plant stocks both have risen”.
At the same time, “the coal-exporting nations suffering from this decline in demand are the two giants, Indonesia and Australia, while US exports are down on lower UK imports. On the positive side, the longer-than-normal grain season in South America has benefited primarily the Supramaxes, which apparently defy gravity as being the segment with the highest freight rates, while also facing the biggest increase in fleet size in the dry-bulk sector. Additionally, strong steel exports out of China have contributed to higher Supramax fleet use”.
BIMCO’s report also noted that “the second issue about ton–miles has also come into play this year as a part of the decline in coal has cut off the longer trades at the expense of the shorter hauls. The complete absence of South African thermal coal exports to China for more than a year now is a devastating example of this, especially when it is substituted by non-seaborne imports. In 2014 South Africa supplied China with 5.2mt of thermal down from 12.4mt in 2013.
Meanwhile, “the freight rates for all dry-bulk segments have been low throughout 2015, the July/August spike for Capesize ships being the short-lived exception. Averages for the first eight months of 2015 range from USD 5,605 per day for a Handysize to USD 8,163 per day for a Capesize. The poorest freight market on record is due to a combination of demand weakness and capacity abundance. Unfortunately, there are no easy ways to escape this. As China is going through a period of transition that does not favour the dry-bulk shipping industry, the prime driver is out of the picture. Capacity has been abundant for years, so it’s the change to the demand side, the variable that the industry cannot impact, which is at the epicentre in 2015”.
Supply-wise, BIMCO said that “speaking of the contributing factors to an improved shipping market, the dry-bulk fleet has grown only marginally during the first nine months. The inflow of 39.7 million DWT, which has been offset by demolition of 23.8 million DWT, means a fleet growth of just 2.1%. Continuance of a low fleet growth is vital to achieving an eventual recovery and a return of sustainable earnings for the industry. A central element in that equation is a low level of new orders. This has been accomplished by a landslide margin. In Clarksons orderbook statistics, there were only 84 new contracts recorded at the end of August. Such a cautious attitude is quite the opposite of what happened less than two years ago, when capacity equal to the year-to-date amount in 2015 (4.7 million DWT) was contracted in just 16 days!”
According to Mr. Sand, “demolition also holds a key position in today’s and tomorrow’s fleet-growth level. Although 306 ships have left the fleet so far in 2015, owners’ interest in making use of the demolition “tool” to limit supply growth seems to have evaporated completely over the summer. In early July, BIMCO cautioned that a new full year record level of demolished capacity would not arrive in spite of a record first half of the year. Unfortunately, our expectations have proven to be all too right. Spiking Capesize rates immediately cooled owners’ interest in the hope that a market rebound was around the corner”.
Furthermore, the strong Chinese steel export at discount prices to the countries that used to prefer scrap steel to new steel means that scrap prices keep heading lower and lower as volumes decrease. “Only 37 ships were sent to the blow torch in July and August. As trading conditions continue to challenge all shipowners and operators, everything that can be done to delay the delivery of the next ship has been done within the legally binding nature of a newbuilding contract. It is not easy to discuss terms with shipyards at a late stage in the building process, but the result is now clear. 2015 is about to receive “only” 49 million DWT, which will bring fleet growth down to a 10-year low at 2.5%”, BIMCO concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Tuesday, 03 November 15
API 5 FOB NEWCASTLE COAL SWAPS DECLINE CONTINUES
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery slid $1.84 per ton (4.34%) month over month to US$ 40.54 per ton. The swap ...
Tuesday, 03 November 15
EU OIL MAJORS FACE FURTHER EARNINGS DECLINE IN Q415 - FITCH RATINGS
The sharp drop in major European oil companies' third-quarter profits is likely to be extended in the fourth quarter as refining margins, which ...
Monday, 02 November 15
DESPITE CHALLENGING MARKET CONDITIONS, ADARO LOWERS COSTS, DEBT AND DELIVERS STRONG FREE CASH FLOW
COALspot.com: Despite challenging market conditions, Adaro lowers costs, lowers debt and delivers strong free cash flow.
The Indonesia’s ...
Monday, 02 November 15
CFR SOUTH CHINA COAL SWAPS CLOSED ON A WEAK NOTE
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined US$ 1.81(3.71 %) per ton month over month.
A commodity swap ...
Sunday, 01 November 15
THE FREIGHT MARKET SENTIMENT REMAINS WEAK
This week’s freight market sentiment remains weak compared to last week.
The Baltic Dry Index (BDI), an economic indicator issued daily ...
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Showing 2736 to 2740 news of total 6871 |
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- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Australian Coal Association
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
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