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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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Saturday, 18 February 23
PAKISTAN PLANS TO QUADRUPLE DOMESTIC COAL-FIRED POWER, MOVE AWAY FROM GAS - REUTERS
Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming ...
Saturday, 18 February 23
2023 MARINE FUEL MARKET PREDICTIONS - JOHN BERGMAN, AURAMARINE
The drive for decarbonisation we witnessed in 2022 has continued into 2023, demonstrating the shipping’s industry positive strides in the fas ...
Saturday, 28 January 23
COAL GROWTH BLIP NOT TO BE REPEATED - BALTIC EXCHANGE
As 2022 drew to a close, global coal demand looked set to end the year just 1.2% up on the previous year. But that small increase was enough to pus ...
Thursday, 26 January 23
CHINA'S COAL OUTPUT INCREASES IN DECEMBER 2022 - XINHUA
China’s raw coal output posted stable expansion in December 2022, official data showed.
The country produced 400 million tonne ...
Thursday, 26 January 23
COKING COAL NARROWS THE GAP ON THERMAL AS CHINA REOPENS - REUTERS
The premium of high-grade thermal coal over coking coal in Asia is shrinking as China’s re-opening and ending of a ban on imports from Austra ...
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- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- White Energy Company Limited
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
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