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Friday, 25 March 16
DRY BULK SHIPPING FLEET WILL GROW BY 1.3% DURING 2016 - BIMCO | HELLENIC SHIPPING NEWS
 The dry bulk market will keep on suffering, at least until the start of 2017 and possibly well after that, should the current balance of supply and demand remain without any significant change until then.
In an interview with Hellenic Shipping News Worldwide (www.hellenicshippingnews.com), BIMCO’s Chief Shipping Analyst, Mr. Peter Sand notes that with the BDI currently hovering around 400 points, the market is still far below a sustainable level. According to Mr. Sand, it’s worth noting that despite of the record amount of tonnage already scrapped since the start of the year, the overall fleet keeps on growing, as more and more newbuildings are being delivered.
Which factors have contributed to the rise of the dry bulk market over the past few weeks?
The poor condition of the dry bulk freight market in Q1-2016 is partly down to volumes coming down seasonally from Q4 to Q1 and partly due to the continuous growth of the dry bulk fleet. In spite of a new record high amount of tonnage being scrapped from start of the year, the fleet is still growing as even more new tonnage has been delivered.
Since the BDI reached the all-time-low level at 290 on 11 February 2016 a much welcome, but also modest and tepid rise has occurred. In part due to rising demand from China, as buyers of dry bulk commodities have returned from CNY-celebrations. Additionally the beginning of the South American grains season has lifted all ship sizes except for the Capesizes.
How far are we from determining that freight rates are at a viable level for most dry bulk owners, i.e. covering daily OPEX and leaving room for some profit as well?
There is a long way to go before we reach utilization levels around 85-90%. BIMCO estimates that levels like that are needed in order to bring sustainable freight rate levels around. Currently we estimate utilisation rates at the low 70’es. Sustainable freight rates, cover your OPEX, your financing cost, depreciation, overheads and includes profit margin on top of covering the cost. This will enable you to grow and run a business that provides the best service to your costumers every day. A BDI currently at 398 is far below a sustainable level.
BIMCO remains worried about the sustainability of freight rates in 2016. The demand side seems unable to buoy profits as both Chinese and Indian import growth cools off and the rest of the world is still importing smaller volumes than before the financial crisis of 2008.
Have we seen an increase of speeds, as a result of lower bunker rates and has this increased tonnage availability, thus further hampering the market’s recovery?
Yes we have, and it has proven toxic to an already ailing market. In particular speed went up in Q3 as freight rates rose. But the subsequent collapse was made increasingly hard and steeper by the rise in speed. The low fuel price level is welcome as it cut costs. But it remains of absolute importance to the market that the supply side growth rate is kept low or negative for years to come. Increasing speed, more newbuilding orders and idling instead of outright scrapping are all factors that push an eventual sustainable market further into the future.
How many ships were sold for demolition so far this year, compared to last year?
We have 144 ship on record as sold for demolition this year-to-date. 11.9m DWT. In the first quarter of 2015, 142 ships with a combined capacity of 9.9m DWT was scrapped.
Is this level of decommissioning enough to alleviate tonnage oversupply?
Only if that pace continues for at least two more years we will see a much needed cut in excess capacity in the market. BIMCO forecast 40m DWT to be scrapped in 2016, so it will be an unseen achievement if the industry can keep up the pace of scrapping going forward. As the demand side is moving forward a dead-slow speed, cutting down on capacity is the only way to a significant improvement of the fundamental market balance.
Are there enough “candidates” for demolition, in terms of the global fleet’s age profile?
If you go by a historical definition of how old ships once were when sold for demolition, “No” would be the reply. Only 20m DWT of dry bulk capacity is built in 1990 and earlier. Cutting a bit deeper, only taking age measures into account, 50m DWT of dry bulk capacity is built in 1994 and earlier.
But what’s the point of having a lot of ships around if they all lose money. Removing all ships built in 2000 and earlier would see 125m DWT go, such a number is likely to be needed should a sustainable freight rate level be brought back.
Can you give us an estimate of the current slippage rates?
As 2015 progressed BIMCO estimates that the slippage rate went from 30% to 40% where it currently sits.
Where do you see net fleet growth by the end of the year?
The dry bulk supply side has developed closely along the lines of BIMCO forecast. We estimate 50m DWT to be delivered and 40m DWT to be scrapped. This will leave the supply side to grow by 1.3% in 2016.
Where do you see the market by the start of the summer?
In a better place. But without any landmark changes. BIMCO estimate the supply side growth to ease a bit during Q2 while the demand side is supported by increased transportation demand for soya and iron ore.
Will China’s new policy plan help boost demand for dry bulk commodities?
China is in a phase of transition, which is good for the overall stability of the nation and the economy as such. But the transition is hurtful to dry bulk import demand. BIMCO estimate the demand for both key imported commodities, coal and iron ore will contract in 2016. Having said that, China’s “One belt, One road” does hold elements that is supportive to the dry bulk market. We expect this to provide for a “soft landing”, meaning that China will uphold significant import volumes going forward, despite the lack of growth – even some set back.
Will India emerge as a strong contender for coal imports, replacing – sort of speak – China, in that respect?
No, India is a completely different story to China. Most recently the political winds of change in India only seems to harm dry bulk demand. In 2015 imports of thermal coal into India dropped for the first time since 2003. Having said that Indian import of thermal coal has been higher than China’s since 2014. Future demand growth from India holds a lot of potential, but it is doubtful if it will ever be unleashed.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Wednesday, 23 March 16
THE PANAMA CANAL - WILL THE MELTING OF POLAR ICE CAPS CREATE RIVAL NAVIGATIONAL WATERWAYS THROUGH THE ARCTIC? - INTERMODAL
The Panama Canal, 102 years after its initial opening, is now about to have its expansion completed with a cost of USD5.25 Billion. It is a project ...
Tuesday, 22 March 16
FOUR NEW MARKET MEMBERS HAVE JOINED GLOBALCOAL
globalCOAL® announced yesterday that four new Market Members have joined its international trading community.
Ferrocadia DMCC is an intern ...
Monday, 21 March 16
INDONESIAN 4200 GAR COAL INDEX ROSE $0.12 OR, 0.44% WEEK OVER WEEK; INDEX CLOASED AT $27.19 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.21 percent week over week to averaging $38.90 per ton on this past Friday, ac ...
Monday, 21 March 16
THE BALTIC DRY INDEX ROSE SLIGHTLY WEEK OVER WEEK; BCI UP 11.93%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued rose this week helped by higher rates for Cape ...
Friday, 18 March 16
OUTLOOK ON GLOBAL SHIPPING SECTOR TURNS NEGATIVE AS SUPPLY-DEMAND GAP WIDENS AND EBITDA DECLINES - MOODY'S
Moody’s Investors Service (Moody’s) has changed its outlook on the global shipping sector to negative as it expects supply growth to ou ...
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Showing 2511 to 2515 news of total 6871 |
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- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- PTC India Limited - India
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
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