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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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Thursday, 29 October 15
Q2' 16 FOB INDONESIA COAL SWAP CLOSED US$ 37.40 PER TON; DECLINED 5.56 PER CENT M-M
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 2.13 (-5.34%) per t ...
Wednesday, 28 October 15
Q2'16 FOB RICHARDS BAY COAL SWAP SEES FURTHER DECLINES
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 gained week over week and declined month over month.
The Q4 swap was d ...
Wednesday, 28 October 15
BDI INCREASE TOOK PLACE SOLELY ON THE BACK OF CAPESIZE PERFORMANCE, BUT........ - INTERMODAL
COALspot.com: The Dry Bulk market closed off the week noting a small improvement which nonetheless failed to lift sentiment, not only because ...
Tuesday, 27 October 15
Q1'16 API 5 FOB NEWCASTLE COAL SWAP DECLINE 6 PER CENT M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery decreased $2 per ton (4.66%) month over month to US$ 40.93 per ton. The swa ...
Monday, 26 October 15
PORT OF NEWCASTLE SHIPPED 10.5 PER CENT LESS COAL IN SEPTEMBER, COMPARED TO AUGUST LOADING
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.161 billi ...
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- MS Steel International - UAE
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Australian Coal Association
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- PTC India Limited - India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
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