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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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Wednesday, 19 October 22
WHAT WILL THE GAS MARKET LOOK LIKE IN A NET ZERO WORLD? - WOOD MACKENZIE
The global gas and LNG market faces a number of ‘great unknowns’. With the market in turmoil uncertainty abounds – from the scale ...
Wednesday, 19 October 22
MARKET INSIGHT - INTERMODAL
The LNG market remains extremely tight, and as a result adding further pressure on the vessel charter market, which is already stretched due to the ...
Sunday, 16 October 22
COULD A RETURN TO SHALE EXPLORATION BE PART OF THE SOLUTION TO EUROPE'S GAS SUPPLY PROBLEM? - WOOD MACKENZIE
The European gas market is in turmoil. Russia’s invasion of Ukraine has shaken things up, triggering a complete rethink of European energy st ...
Thursday, 13 October 22
THERMAL COAL PRICES RETREAT AS WINTER SUPPLY FEARS EASE - REUTERS
The prices of key thermal seaborne coal grades are retreating amid signs that supplies will be sufficient to meet winter demand in both Europe and ...
Thursday, 13 October 22
SPOT COAL BIDDING: CHINESE FIRM WANTS REVISED MECHANISM - BUSINESS RECORDER
Chinese company M/s Huaneng Shandong Ruyi (Pakistan) Energy Limited (HSR) has cautioned National Electric Power Regulatory Authority (Nepra) that i ...
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- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- The University of Queensland
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- PTC India Limited - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
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