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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
INVESTMENT IN GLOBAL COAL SUPPLY CHAIN TO HIT $115 BN IN 2022, LED BY CHINA AND INDIA - BUSINESS LINE
At over $80 billion, China and India are anticipated to make up the bulk of global coal investment in 2022, says IEA.
The investment ...
Wednesday, 29 June 22
LNG MARKET REMAINS TIGHT - INTERMODAL
LNG market remains tight currently, mainly driven by the US LNG outage from the recent fire in Freeport LNG terminal together with the recent fall ...
Wednesday, 29 June 22
CHINA'S NEW PLAN FOR RENEWABLE ENERGY DEVELOPMENT FOCUSES ON CONSUMPTION - FITCH RATINGS
China’s focus on consumption penetration for renewable energy development in its recently released 14th five-year plan – 2021 to 2025 & ...
Wednesday, 29 June 22
APAC CORPORATE SECTOR OUTLOOKS SHIFT AMID GLOBAL SHOCKS - FITCH RATINGS’
Fitch Ratings’ mid-2022 corporate sector outlook review revealed that the Asia-Pacific (APAC) region saw the largest number of sector outlook ...
Thursday, 16 June 22
MARKET INSIGHT - INTERMODAL
Picking up from my last insight in March, on the early days of the invasion, it's worth pointing out the way that the fast-paced working enviro ...
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- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- The University of Queensland
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
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