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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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Tuesday, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Australian Coal Association
- Deloitte Consulting - India
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Minerals Council of Australia
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
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