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Monday, 20 March 17
IS THE DRY BULK INDUSTRY STILL ON TRACK FOR PROFITABILITY IN 2019? - PETER SAND
 The industry remains well on target for profitable freight rates in 2019! This relies however, on the projected fleet supply growth rate of 0% in 2017 continuing. The handymax segment may even see profits in 2018 as demand may go beyond 2% in 2017 – before reverting to 2% in 2018 onwards. In 2016, the supply side grew by 3.0% and the demand side grew by 2.4% – measured on a tonnemile basis.
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Overview
This recent lift in freight rates is certainly positive, but there is still work to be done on the supply side. A significant level of demolition activity must be maintained, and increasing focus must also be on keeping slow steaming around. Estimating a return to profitability in the dry bulk industry remains a moving target, and one that differs from one company to the next. But by projecting a course for profitability, everyone in the industry can use it as a reference.
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This resulted in a worsening of the fundamental market balance. However, as the original “Road to Recovery” in May 2016 projected an even worse fundamental deterioration in 2016 – we are today, in a relatively better position than anticipated nine months ago.
BIMCO’s Chief Shipping Analyst Peter Sand comments:
“Estimating a return to profitability in the dry bulk industry remains a moving target, and one that differs from one company to the next. But by projecting a course for profitability, everyone in the industry can use it as a reference.
The fact that the first half of February 2017 was a troublesome period came as no surprise and it makes the strong comeback in the following month stand out as even more remarkable. During that time, the BDI went from 688 to 1,147.
This lift in freight rates is certainly positive, but there is still work to be done on the supply side. A significant level of demolition activity must be maintained, and increasing focus must also be on keeping slow steaming around”.
What has changed?
Besides a relatively better fundamental balance, mostly the daily running costs! The drop in OPEX more than makes up for the fundamental deterioration of the freight market. Speed may also be a factor coming into play as renewed optimism and upwardly moving freight rates are often followed by a less intense focus on maintaining slow steaming.
In total, freight rates will be slightly higher than originally projected for the coming years. Combining the relatively better freight market, with a 10-year-low OPEX level in 2016 – the dry bulk industry remains on the road to recovery.
Even small changes matter
Using the assumptions already mentioned above for the supply and demand side, a further drop in OPEX of 5% will also bring profits for the handysize sector in 2018. This will then mean a justprofitable industry in 2018 overall. However, not profitable for all the sub-sectors, as the panamax and capesize sectors are estimated to remain in the red.
Moreover, a higher supply side growth rate than 0% in 2017, which BIMCO expect to be the case, may not completely wipe out recovery in 2019. As demand is expected above 2% as a target growth in 2017, ‘damage’ from a slip on the supply side is reduced by a stronger demand side.
By: Peter Sand,
Chief Shipping Analyst
BIMCO
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Tuesday, 21 March 17
DESPITE THE CHALLENGING MARKET SITUATION IN 2016 THE DELTA DUNIA MAKMUR HAS ACHIEVED A NET PROFIT OF US$37 MILLION
COALspot.com: PT Delta Dunia Makmur Tbk. has announced its financial results for the period ended December 31, 2016.
Despite challenging marke ...
Tuesday, 21 March 17
JAPAN'S RENEWED COMMITMENT TO COAL - BENJAMIN SPORTON
Japan is one of the largest economies in the world, and has long been a major consumer and importer of energy and a leader in energy technology dev ...
Friday, 17 March 17
U.S WEEKLY COAL OUTPUT VOLUME SLIDES 6.5 PERCENT WEEK OVER WEEK - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 14.7 million short ton ...
Thursday, 16 March 17
CHINA IMPOSING TOUGHER CONTROLS ON LOW-QUALITY COAL IMPORTS
China is ramping up controls on imports of low-quality coal due to concerns about smog and overcapacity in the world’s top coal consumer, a g ...
Thursday, 16 March 17
CAPESIZE: SHOWING STRENGTH; PANAMAX: VERY QUIET - FEARNLEYS
Supramax
The Atlantic market faced less activity from the USG whereas at the Cont tonnage seemed to tighten up with more cargoes emerging. Despit ...
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- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- The University of Queensland
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- Australian Coal Association
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
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