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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, 29 July 22
GLENCORE TO SUPPLY COAL TO NIPPON STEEL AT $375 PER TON - BLOOMBERG
Glencore Plc, agreed to supply coal to Nippon Steel at one of the highest prices ever paid by the Japan Bloomberg reported on July 27.
...
Friday, 29 July 22
GLOBAL COAL DEMAND IS SET TO RETURN TO ITS ALL-TIME HIGH IN 2022 - IEA
The world’s consumption of coal is set to rise slightly in 2022, taking it back to the record level it reached nearly a decade ago, according ...
Thursday, 28 July 22
CREW FAMILIARISATION IS CRITICAL WHEN TAKING OVER A VESSEL - WEST P&I CLUB
Knowledge to Elevate
When a vessel changes ownership and/or manager, it can take some considerable time before the new crew and mana ...
Thursday, 28 July 22
RETURN OF COAL A THREAT TO EUROPEAN COMPANIES' ESG RATINGS - REUTERS
European companies turning to coal as an alternative to Russian gas face a hit to their environmental, social and governance ratings, leaving them ...
Wednesday, 27 July 22
MARKET INSIGHT - INTERMODAL
Amid the upcoming ban on Russian coal from the EU, which will be in full effect on August 10th, EU nations have been accelerating their coal import ...
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- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- GMR Energy Limited - India
- White Energy Company Limited
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- The University of Queensland
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