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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, 29 November 22
SEABORNE COAL FLOWS IN 2022 - SIGNAL
This year is crucial for the energy mix in European countries, as the EU has imposed new sanctions on Russia. It is important to emphasize that the ...
Friday, 25 November 22
APAC THERMAL COAL PRICES CORRECT FROM RECORD HIGH - FITCH RATINGS
Prices of Newcastle 6,000kcal/kg coal have corrected following falling European gas and coal prices, and more supply from Australia could help miti ...
Thursday, 24 November 22
VIETNAM BOOSTS COAL USE PLAN FOR 2030 AS G7 CLIMATE OFFER STALLS - REUTERS
Vietnam has increased its coal power target for 2030 under a revised draft energy plan, government documents seen by Reuters show, while renewables ...
Tuesday, 22 November 22
THE GENCON 2022 CHARTERPARTY - GARD
KNOWLEDGE TO ELEVATE
BIMCO has published a revamped version of the popular GENCON charterparty. Our author, Helena Biggs, was a member of the ...
Tuesday, 22 November 22
INDIA POWER BINGES ON COAL, OUTPACES ASIA - REUTERS
India’s coal-fired power output has increased much faster than any other country in the Asia Pacific since Russia’s invasion of Ukraine ...
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- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- CNBM International Corporation - China
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Planning Commission, India
- Economic Council, Georgia
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- PTC India Limited - India
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
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