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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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Wednesday, 21 October 15
RUSSIA'S CARBO ONE COAL SALES TO HIT 50 MLN T/YR - JACQUELINE HOLMES
COALspot.com: Russia's Carbo One has become one of the world's leading physical coal traders with an annual volume approaching 50 million t ...
Wednesday, 21 October 15
MARKET INSIGHT - TIMOS PAPADIMITRIOU
In today’s dry bulk market, both freight rates and asset prices are creating mixed feelings to seasoned ship owners, who tend to instinctivel ...
Wednesday, 21 October 15
INDONESIAN COAL MINER BUKIT ASAM POSTS POSITIVE PERFORMANCE DURING FIRST THREE QUARTERS OF 2015
COALspot.com: Indonesian publicly listed and state controlled coal miner PT. Bukit Asam has announced that, the company’s coal sales up 8 per ...
Wednesday, 21 October 15
LOWER DEMAND HIT Q1' 16 INDONESIA COAL SWAPS
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 1.88 (-4.71%) per t ...
Tuesday, 20 October 15
SHIPBROKER SEES CAPESIZE RATES EASILY REACHING $25,000/DAY BY YEAR-END : NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The future course of the dry bulk market has been troubling market participants for quite some time now, as the “elusive” freight rate ...
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- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Planning Commission, India
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
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