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Tuesday, 07 November 17
DRY BULK SHIPPING: TAKE GOOD CARE OF THE RECOVERY SAYS PETER SAND
 Demand:
Even without much support from Brazilian iron ore exports during August, capesize rates went from $10,000 to $17,000 per day. In September, those gains were retained until Chinese Golden Week in early October reduced trip chartering interest, dampened demand and lowered the freight rates. Not dramatically, but noticeably, says Peter Sand, Chief Shipping Analyst at BIMCO.
Capesize ships have (as of 26 October) been in profitable territory (above $15,300 per day) since 11 August and panamaxes likewise, since 5 September (above $10,200 per day).
Handymax/supramax/ultramax owners and operators who fixed their ships after 21 August, have also seen freight rates covering, not just operational expenditures (OPEX) but also capital expenditures (CAPEX), leaving a slim return on investment. This has only happened three times- for more than two days in a row – in the past two years. Finally, the handy size segment has, for the first time since April 2014, reached a freight rate level above $9,000 per day.
According to Peter Sand, this ongoing recovery is still in a “fragile” state – demand has increased but so has supply. This means only a slight fundamental market improvement. The return to permanent profitable freight rates is still way off. The transport demand for dry bulk cargoes in Q1-2018 is considerably lower than the volumes transported in Q4-2017, and that’s the first hurdle to cross. Maintaining slow steaming is another prerequisite to hold onto the gains that have been achieved.
At the centre of dry bulk demand, as always, is China; growing its seaborne imports of coal during the first nine months of 2017 by 18.7%, and its seaborne imports of iron ore during the first eight months, by 6.9% year-on-year. In total, this is a demand growth of 79m tonnes (27 + 52 respectively) for the two commodities year-to-date. Setting a new world record in steel production for the month of August of 74.6m tonnes, resulted in total growth of 5.6% for eight months’ production in 2017, compared with the same period last year.
Another record was reached in September, when Chinese iron ore imports exceeded 100m tonnes for the first time.
While this is much needed by the dry bulk shipping industry to get out of the doldrums of recent years, there may be a limit as to how far this can go. Imagine if steel production stalls, then iron ore imports are likely only to grow at the expense of domestically mined ore.
BIMCO calculates that substitution of low-quality, domestically mined iron ore in China, for imported high-quality iron ore from Brazil or Australia, would have increased imports by 17m tonnes per month in the first eight months of 2017.
Regardless of recent reports, about one in three Chinese iron ore mines being at risk of losing their mining licenses due to environmental issues, the output from Chinese iron ore mines is still up by 5% in the first eight months, year-on-year. One of the key risk elements in the equation is actual steel consumption in China.
In addition to the strong growth that we have seen into China, US coal exports have certainly added to the panamax and capesize demand in the Atlantic since Q4 2016.
Peter Sand further noted in his report, from November 2016 to July 2017, we have seen a monthly average of 6.4m tonnes of coal being exported from the US to a vast number of destinations like Japan, Egypt, Turkey, South Korea, China, Guatemala, India, Spain and Morocco. This is up by 61% versus the same nine months of the year before. Key export ports, mostly on the Atlantic side, are Hampton Roads and Baltimore, where panamax and capesize ships are used to export 60% of the total volume. In the US Gulf, Mobile dominates exports with shipments of coal in panamax. On the Pacific side, US coal exports are handled via Vancouver.
The total tonne miles adjusted demand growth rate in 2017, is forecast to be 3.9%, the highest in three years.
Supply:
Commenting on supply side, Peter Sand, Chief Shipping Analyst at BIMCO said, the delivery pace has reduced significantly since H1-2017, but so has demolition activity. During H1-2017, 28m DWT was delivered, while 8.5m DWT was demolished. Whereas Q3-2017 has seen only 6m DWT delivered, and 3.6m DWT permanently leaving the active fleet.
Demolition of handymax tonnage, has been dominant this year – a natural reaction from owners operating in that segment, which has seen fleet growth around 5% pa for some time now, clearly outpacing all the other dry bulk segments.
Contracting activity for the year so far, has as expected, gone up from the extraordinarily low levels that we experienced in 2016. While Q1 2017 was still quiet in terms of actual orders, newbuild interest was growing in the background. The larger segments are popular. Panamax and very large ore carriers (VLOC) account for 15 out of the 17m DWT ordered in total, year- to- date (until 2 October). It’s worth noting that many of the VLOCs have been ordered against a long-term charter, most likely replacing existing long-term chartered VLOCs when they are retired. Later in October, another 5 VLOCs were ordered.
For the first nine months of the year, the dry bulk fleet has grown by 2.7%, already a three-year high. BIMCO expects the fleet will end up growing by 3.1% to 16m DWT as demolition expectations are lower than the previously anticipated 19m DWT.
In the future, expected fleet growth remains quite low based on the ships on order now – and does not include orders not yet placed. 2018 could see the fleet grow by less than 1%.
Outlook:
Should we look no further than China when it comes to dry bulk market demand?
No, is the short answer – at least not in relation to steel production ingredients – iron ore and coking coal. In 2008, global iron ore imports were at 841m tonnes, out of which China took 436m tonnes (52%). In 2017, the global seaborne market is at 1,478m tonnes, out of which China takes 1,075m tonnes (73%).
For thermal coal, a few other nations are worth taking note of, in addition to China. Those are India, South Korea and Malaysia. Additionally, the US seems to have re-established itself as an option in the seaborne coking coal market, providing long distance voyages into Asia. Ever since the outbreak of the global financial crisis in 2008, the dry bulk market has only had one growth area: Asia. All other regions of the world contribute with steady or declining imports.
Note that European imports of:
- Iron ore are down from 140m tonnes in 2008 to 117m tonnes in 2017
- Coking coal are down from 59m tonnes in 2008 to 46m tonnes in 2017
- Thermal coal are down from 156m tonnes in 2008 to 128m tonnes in 2017.
For the current time and Q4 2017, selected seaborne trades from major exporters including iron ore, coal, grains, soya and steel products are expected to grow by 3.4% from Q3 2017 (source: SSY). Whereas, grain peaks in Q1 and Q3, and soya in Q2, the seaborne trading of steel products, coking coal, thermal coal and iron ore will all peak in Q4.
After a bit of a downturn in the market during the first half of October (which was expected), demand lifted freight rates again. It’s time to make the most of it, before seasonal low demand in Q1-2018 get the upper hand and push freight rates down Peter Sand, Chief Shipping Analyst at BIMCO concluded.
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Wednesday, 22 November 17
THERMAL COAL WAS FLAT AMID CONCERNS OF FURTHER GOVERNMENT INTERVENTION IN CHINA, SAYS DANIEL HYNES
Coal prices were mixed. Thermal coal was flat amid concerns of further government intervention in China, said Daniel Hynes Senior Commodity Strateg ...
Wednesday, 22 November 17
CHINA CONSUMES MORE THAN TWO-THIRDS OF THE GLOBAL SEABORNE IRON ORE MARKET; PRODUCES AS MUCH STEEL AS THE REST OF THE WORLD COMBINED - CHRISTOPHER T. WHITTY
China consumes more than two-thirds of the global seaborne iron ore market and at the same time produces as much steel as the rest of the world com ...
Monday, 20 November 17
INDONESIAN COAL BENCHMARK PRICE SURGES 0.86% TO $94.80 A TON, GOVERNMENT DATA SHOWS
COALspot.com: Indonesian coal benchmark price surges 0.86% in November compared to declared price in October, the latest ministerial decree showed. ...
Friday, 17 November 17
U.S. PRODUCED 678.8 MMST OF COAL YEAR TO DATE; 9% UP Y/Y, EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 14.8 million short ton ...
Thursday, 16 November 17
PANAMAX ACTIVITIES HAVE SLOWED DOWN QUITE SUBSTANTIALLY THE LAST WEEK - FEARNLEYS
Supramax
Another week with rates easing over all the Supra routes within Atlantic.
Front hauls from USG got payed around 21-22k daily and ul ...
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Showing 1871 to 1875 news of total 6871 |
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- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
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