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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, 22 September 15
1Q16 FOB INDONESIA COAL SWAP DECLINED 6.49 PER CENT M-M
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week.
The 4Q swap declined $ 2.29 (-5.42%) per t ...
Tuesday, 22 September 15
FOB RICHARDS BAY COAL SWAPS FALL CONTINUES
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined week over week and month over month.
The 4Q swap was down US$ ...
Monday, 21 September 15
Q4' 15 FOB NEWCASTLE COAL SWAP CLOSED HIGHER THAN Q2' 16 SWAP
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery increased $0.43 per ton (1.01%) month over month to US$ 42.95 per ton. The ...
Monday, 21 September 15
CFR SOUTH CHINA COAL SWAP GAINED WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 0.45 (0.90 %) per ton month over month.
A commodit ...
Monday, 21 September 15
KOMIPO OF KOREA INVITES BIDS FOR BITUMINOUS COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 390,000 Metric Tons (MT) of minimum 4,600 kcal ...
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- Semirara Mining Corp, Philippines
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- Thiess Contractors Indonesia
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
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- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Indian Energy Exchange, India
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- PNOC Exploration Corporation - Philippines
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- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- The Treasury - Australian Government
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- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
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- Bhushan Steel Limited - India
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- Power Finance Corporation Ltd., India
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- Formosa Plastics Group - Taiwan
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- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
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- Central Electricity Authority - India
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- Australian Coal Association
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- Sical Logistics Limited - India
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- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
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- Singapore Mercantile Exchange
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- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
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- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Marubeni Corporation - India
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
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- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
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- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- London Commodity Brokers - England
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- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
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- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- The University of Queensland
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
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- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
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- Parliament of New Zealand
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