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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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Friday, 23 September 22
CHINA DIGS DEEP TO RAISE COAL OUTPUT TO RECORD HIGH - REUTERS
China’s coal production has surged this year as the government seeks to improve energy security by reducing dependence on imports and amassin ...
Friday, 23 September 22
EUROPEAN STEEL BUYERS SEEK DIRECTION IN VOLATILE MARKET - MEPS INTERNATIONAL
Demand for steel is slow to recover, after the summer break. Mill production costs continue to increase. Steel purchasers are uncertain about the f ...
Friday, 23 September 22
BUOYANT COAL INDUSTRY SEEKS WAYS TO STAY IN THE LONG-TERM ENERGY MIX - REUTERS
There’s no doubt that the global coal industry has been a major beneficiary of Russia’s invasion of Ukraine and the subsequent energy c ...
Friday, 23 September 22
MARKET INSIGHT - INTERMODAL
In view of the forthcoming winter, Europe is trying to escape from its energy (oil & gas) dependency from Russia to ensure energy abundance eve ...
Tuesday, 20 September 22
CHINA'S DAILY COAL OUTPUT HITS 3-MONTH LOW IN AUGUST ON RAINS, COVID CURBS - REUTERS
China’s daily coal output in August slipped to a three-month low as some mines in its biggest coal mining regions reduced operations or even ...
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- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- The University of Queensland
- MS Steel International - UAE
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- White Energy Company Limited
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- VISA Power Limited - India
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
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