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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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Thursday, 16 November 17
KOMIPO INVITED BIDS FOR 3.9 MILLION TONS OF 5700 NAR AND 5400 NAR COAL FOR 2018 - 2020 DELIVERY
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued an another new tender for total 3,900,000 Metric Tons of min. 570 ...
Thursday, 16 November 17
THE PORT OF NEWCASTLE HAS SHIPPED 14.94 PERCENT LESS COAL IN OCTOBER 2017, DATA SHOWS
COALspot.com: The Port of Newcastle, Australia’s major trading ports, and the world’s largest coal export port has shipped $AU 1,466.8 ...
Thursday, 16 November 17
GOVERNMENT, 13 COAL MINERS AGREE TO CHANGE CONTRACTS - JP
The government and 13 coal mining companies have agreed to change the old Contract of Work (CoW), as part of the implementation of Law No. 4/20199 ...
Wednesday, 15 November 17
IEA RECOGNISES COAL'S CONTINUOUS IMPORTANCE TO GLOBAL ENERGY NEEDS - WCA
The World Coal Association (WCA) has welcomed the International Energy Agency’s (IEA) recognition that coal will continue to play a vital rol ...
Wednesday, 15 November 17
THERMAL COAL WAS DRAGGED DOWN BY THE WEAKNESS ACROSS THE WIDER ENERGY SECTOR - DANIEL HYNES
The coal market was mixed.
Thermal coal was dragged down by the weakness across the wider energy sector, said Daniel Hynes Senior Commodi ...
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Showing 1876 to 1880 news of total 6871 |
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- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
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