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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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Tuesday, 17 October 17
U.S RECORD EXPORTS OIL TO EAST HAS HELPED THE TANKER TRADE - GEORGE LAZARIDIS
There was a flood of fresh news this week which clouded the overall prospects of the crude oil market. Just one week prior Saudi Arabia and Russia, ...
Monday, 16 October 17
INDONESIA TO INDIA COAL FREIGHT RATES STAY FIRM
COALspot.com: The daily average earnings for Supramax, for the route Indonesia to India passing through Singapore has stayed firm, week over week, ...
Friday, 13 October 17
INDIKA ENERGY SIGNS SHARE PURCHASE AGREEMENTS FOR AN ADDITIONAL 45% STAKE IN KIDECO
PT Indika Energy Tbk. and its wholly-owned subsidiary PT Indika Inti Corpindo (collectively, “Indika Energy”) has entered into separate ...
Friday, 13 October 17
THE SHORT-TERM OUTLOOK FOR THE PANAMAX MARKET REMAIN POSITIVE - FEARNLEYS
Supramax
The market has picked up strongly since last week with the Chinese holidays. In the Pacific rates are increasing with some strong number ...
Friday, 13 October 17
U.S. COAL EXPORTS FOR THE FIRST SEVEN MONTHS OF 2017 TOTALED 51 MMST; UP 62% YOY, EIA DATA SHOWS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.2 million shor ...
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Showing 1911 to 1915 news of total 6871 |
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- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Australian Coal Association
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- India Bulls Power Limited - India
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
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