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Thursday, 13 June 13
BIMCO EXPECTS SUBDUED CAPESIZE EARNINGS FOR THE COMING WEEKS - HELLENIC SHIPPING NEWS
 Bulk is not only about China even though it is a key driver. In this section, we have taken a closer look at the European seaborne coal markets, which is going through some interesting times right now. European coal demand has been in a slump ever since early 2009, where seaborne demand fell by 14 million tons from the first to the second quarter. Import volumes during the last three quarters of 2011 indicated that seaborne coal demand was recovering, but the development stalled somewhat in 2012. Looking on a country basis, the nation with the biggest decline was Italy, with annual seaborne imports being roughly 8 million tons lower today than before the financial crisis. France has also decreased its imports by around 4-5 million tons annually. The United Kingdom and Spain have weakened as well, but these countries seem to be on a rebound, with volumes being slightly below pre-financial crisis levels. The Netherlands and Germany have had relatively stable import numbers since 2005.
The bulk of seaborne coal going to Europe comes from North America, Colombia and Russia. The United States and Colombia have doubled their exports to Europe, while Russia has maintained its share of the European demand. Russian coal is shipped from both Russian and Latvian ports; Colombian coal is primarily shipped from the Caribbean, while US coal is primarily shipped from the Atlantic Coast and the Mexican Gulf. The drop in European seaborne demand for coal did not affect these countries, but rather South Africa. From being the single largest coal exporter to Europe with 52.0 million tons in 2005, the country has become a footnote, with 13.6 million tons in 2011. This represents bad business for the shipping industry, since the sailing distance from Richards Bay to Rotterdam is 98% longer than from Hampton Roads and 61% longer than from Puerto Bolivar.
Although European coal imports didn’t tell a particular positive story for shipping, US exports most certainly did. We expect to publish a story on this within the next couple of weeks.
On a more general note regarding the bulk market, China is expected to increase its imports of wheat, as sub-standard storage facilities have damaged a part of the huge Chinese stockpiles. Traders said that China is seeking to increase imports when global prices are in a slump. Current forward prices indicate that this may happen during the third quarter of 2013. According to Chinese customs statistics, the main exporters of wheat to China are Australia, Canada and United States, the latter two providing significant tonne miles.
Meanwhile, Argentina is exporting record high volumes of grains; CRSL reported that Argentina exported 4.86 million tons of grains in March – the highest number ever for a single month. This gave a spike in Panamax rates with the BPI staying just below the psychological barrier of USD 10,000 per day in March and April, but earnings are now slightly lower at around USD 7,000 per day. In our last report, we predicted that Panamax rates would stay in the USD 5,000-10,000 per day territory; going forward seasonal events like Argentinian exports are likely to provide for the upside ticks.
SUPPLY
New dry bulk deliveries walk the anticipated line and have now reached 29 million DWT. Meanwhile, 11 million DWT have been sold for recycling, which brings the year-to-date fleet growth up to 2.8%. The inflow is seen primarily in the Panamax segment, where 136 (in 2012: 162) new vessels are keeping Panamax fleet growth high. Simultaneously, the Capesize segment only saw 48 (in 2012: 115) new vessels coming on stream, eventually easing some of the pain from the current overcapacity.
Average age and size of the demolished tonnage is 28 years and 60,000 DWT. In line with the development seen in the last couple of years, the average age is still trending down – whereas the average size is essentially unchanged. BIMCO forecasts a slightly lower level of tonnage being demolished in 2013 as compared to last year; however, it is still going to be the second-largest year on record. The solid level of demolition prices will inspire owners to consider recycling, rather than trading their old tonnage in a very volatile market without certainty of sustainable freight rates and against more energy efficient tonnage.
As regards the orderbook, it’s also moving in the right direction in spite of the recent flurry of new orders for more fuel-efficient tonnage. During the past 10 weeks the number of newbuilding orders in the book has come down from 1,599 to 1,548. Finally, on the ordering side, strong interest in Capesizes remains evident, with 62 new orders in 2013. A total of 18 million DWT has been ordered in the year so far, with March and April seeing total new orders placed in excess of 4.5 million DWT each month.
OUTLOOK
The Summer lull is creeping up on dry bulk shipping demand following the successful South American grain season. Fortunately, solid demand is keeping spirits up in the dry bulk industry, while the severe extent of overcapacity is pushing the date for a full-blown recovery of earnings into a somewhat distant future. For now the market is getting more and more spot focused, as no owners want to commit tonnage for longer terms at offered levels. Don’t look at the paper market for any support, because you won’t find it. FFA indications (10/6) for Capesize tonnage go to the tune of USD per day: Q3-13, Q4-13, Cal 14 and Cal 15: 7,550, 12,000, 11,450 and 13,700 and for Supramax the indications go as follows in USD per day for the same dates: 7,900, 8,400, 8,600 and 8,900. USD per day in the spot market (10/6): Capesize for 5,571 and Supramax for 9,307.
Expect the unexpected from the dry bulk market seems to be the message passed on in recent years – and today is no different, as Handysize tonnage is earning USD 10,900 per day on an Atlantic round voyage whereas Capesizes are struggling to get a 1 year T/C fixed at USD 10,500 per day if at all. With respect to freight rates for Panamax and Supramax tonnage, they have lost ground since the beginning of March.
To sum up, our forecast for the coming 6 weeks: BIMCO holds the view that Capesize TC average rates are expected to remain subdued around USD 4,500-7,500 per day. Panamax is expected to stay in the USD 4,500-8,000 per day interval. For the Supramax segment, BIMCO forecasts freight rates in the USD 7,000-10,000 per day interval, whereas Handysize rates are forecast to stay at the interval of USD 6,000-8,500 per day.
Source: BIMCO / Hellenic Shipping News
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Sunday, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Australian Coal Association
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- McConnell Dowell - Australia
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