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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, 16 September 22
WHEN IS A VESSEL'S INCOME EARNING CAPACITY AT RISK? 'CONTROLLED INCOME CAN BE A KEY OF SUCCESS' - MARASCO MARINE
Managing marine risks is not an easy task, which requires special knowledge and expertise on the subject per se. Customarily, big ship management c ...
Friday, 16 September 22
DRY BULK MARKET: EU’S BAN ON RUSSIAN COAL LIFTS DEMAND DESPITE ECONOMIC HEADWINDS - BIMCO
Highlights
– The Baltic Exchange Dry Index (BDI) peaked in late May and has since fallen sharply as lower Chinese demand and adverse glob ...
Friday, 16 September 22
BIMCO EMBARKS ON NEW STANDARD FOR “QUIET ENJOYMENT”
KNOWLEDGE TO ELEVATE
A newly set-up BIMCO drafting team involving a cross-section of shipowners, charterers, financing and leasing i ...
Friday, 16 September 22
INDIAN COAL PRODUCTION TO RISE 150 PER CENT IN 10 YEARS: CENTRE - EXPRESS NEWS SERVICE
The Union Ministry of Mines is expecting 150 per cent growth in coal production 10 years down the line as a result of coal reforms that had been us ...
Thursday, 15 September 22
MARKET INSIGHT - INTERMODAL
While the Organization of Petroleum Exporting Countries and its allies agreed on a 100,000 b/d output cut last week, oil flows are in the spotlight ...
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- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Indian Energy Exchange, India
- Planning Commission, India
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
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