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Tuesday, 13 October 15
DRY BULK SHIPPING FLEET NET EXPANSION WAS 1.3% DURING THIRD QUARTER, BUT ORDERBOOK REDUCED TO 17% OF THE TRADING FLEET
 If the dry bulk market is to rebound on a sustainable level, it needs to limit the tonnage expansion, at least until demand picks up again, as China’s slowdown is curbing freight rates. As such, the high level of demolition activity over the first half of the year, helped rates pick up during the third quarter. According to dry bulk ship owner Pacific Basin, Handysize and Handymax market spot rates averaged US$6,000 and US$8,340 per day net respectively in the third quarter of 2015. While only marginally up compared to the same period last year, these average market rates represent a 23% and 30% improvement on the previous quarter.
According to Pacific Basin’s analysis, “the quarter on quarter improvement was largely driven by healthier conditions in the Atlantic on strong South American agricultural exports. Atlantic spot market rates reached early 2014 levels and have since declined as the South American season subsides. By contrast, the Pacific freight market has been relatively flat, demonstrating only a moderate improvement through July which has since been reversed. Weak demand growth in the Pacific is largely due to the continued slowdown in Chinese coal and iron ore imports which together represent a large proportion of overall dry bulk trade”.
Detailing the demand side of things, the ship owner noted that “year-to-date coal imports are 30% down year on year while iron ore imports have been largely flat. Year-to-date Chinese imports of a basket of seven minor bulks are down 2% year on year due mainly to a weaker start to 2015. Minor bulk trade volumes since March were higher than in the same months in 2014 and have lent some support to demand for Handysize and Handymax ships. In particular, Chinese imports of bauxite increased year on year, and imports of soybeans and cereal grains are substantially up. Chinese steel exports have also increased”.
It continued by noting that “on the vessel supply side, the pace of newbuilding deliveries in 2015 has closely tracked 2014 when we saw the lowest rate of new ship additions in 15 years. The high level of scrapping in the first half of 2015 gave way to reduced scrapping in the third quarter due to the improved freight market. As a result, the overall dry bulk fleet expanded by 1.3% net during the quarter, having previously seen no net growth since the end of January. The overall dry bulk orderbook has reduced to about 17% of the trading fleet, but delays, cancellations, conversions and shipyard defaults – primarily in China – are leading to fewer actual deliveries than scheduled at the start of the year. The ship supply surplus built up in 2010-2012 and slowdown in Chinese raw materials imports – especially coal – continue to drive overall weakness, and we continue to manage the business for a weak market in the medium term”.
Pacific Basin also said that “secondhand values have been substantially flat in recent months. Benchmark five year old 32,000 dwt Handysize bulk carriers are currently valued by Clarksons Platou at US$13.0 million which is unchanged since May. Handysize newbuildings are valued at US$20.5 million and the significant gap between newbuilding and secondhand prices continues to discourage new ship ordering and favours buying secondhand ships”.
It concluded by noting that “this weakness will continue to affect shipping businesses and could result in more companies experiencing financial distress along the lines of Daiichi Chuo Kisen Kaisha’s recent filing for bankruptcy protection”.
In a separate report, BIMCO said 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”.
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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- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Economic Council, Georgia
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
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