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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, 08 January 23
ELEVATED COAL PRICE A DRAG ON MARGINS OF DOMESTIC BASE METAL PLAYERS: ICRA
The increased price of coal continue to be a drag on the margin of domestic base metal players with no immediate relief in sight, rating agency ICR ...
Monday, 02 January 23
CHINA’S COAL CONSUMPTION TO PEAK BY 2035: REPORT - REUTERS
China’s primary energy consumption is likely to peak at nearly 6.03 billion tonnes of standard coal between 2030 and 2035, refining giant Chi ...
Thursday, 29 December 22
INDIA'S COAL DEMAND LIKELY TO PEAK BETWEEN 2030-2035: MINISTER - ANI
The demand for coal in India will continue and is likely to peak between 2030-2035, Union Minister of Coal, Mines, and Parliamentary Affairs Pralha ...
Thursday, 29 December 22
RIO TINTO AND PARTNERS COULD RECEIVE AS MUCH AS $450M IN GOVERNMENT COMPENSATION FOR COAL PRICE CAP - THE GUARDIAN
Compensation payments for the Gladstone power plant remain the sticking point in the federal government’s coal price cap compensation negotia ...
Wednesday, 28 December 22
MARKET INSIGHT - INTERMODAL
The United Nations Conference on Trade and Development (UNCTAD) published a Global Trade Update on December 13th highlighting that global trade wou ...
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- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Thai Mozambique Logistica
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Minerals Council of Australia
- Malabar Cements Ltd - India
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