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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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Thursday, 30 June 22
FINANCIAL GAINS SUPPORT COAL TRANSITION - BALTIC EXCHANGE
Support for the shift away from coal dependency continues to mount, with the International Monetary Fund (IMF) calculating that the move would gene ...
Thursday, 30 June 22
WHY ARE LNG SHIPPING STOCKS RESILIENT? - DREWRY
LNG shipping stocks are proving resilient despite uncertainties about growth in global GDP, high inflation and the ongoing geopolitical crisis caus ...
Thursday, 30 June 22
SPOT AUSTRALIAN THERMAL COAL HAS SURGED, BUT CONTRACT PRICE IS KEY - REUTERS
The spot price of Australian thermal coal is higher than that of coking coal, an unprecedented situation that highlights just how the global market ...
Thursday, 30 June 22
SHANXI PROVINCE RAISES ANNUAL COAL OUTPUT TO 1.3 BILLION TONS TO ENSURE CHINA’S ENERGY SUPPLY - GLOBAL TIMES
North China’s Shanxi Province, a major coal-producing region, recently announced a move to increase its annual coal production output by 107 ...
Thursday, 30 June 22
DIVERGENCE BETWEEN HIGH- AND LOW-GRADE THERMAL COAL PRICES IN APAC TO NARROW - FITCH RATINGS
Prices between high- and low-grade thermal coal in Asia-Pacific (APAC) have diverged since late March 2022, but Fitch Ratings expects the gap to na ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Economic Council, Georgia
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Planning Commission, India
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- White Energy Company Limited
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Indogreen Group - Indonesia
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
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