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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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Tuesday, 08 March 22
RUSSIA-UKRAINE CONFLICT ADDS IMPETUS TO ASIA'S ENERGY TRANSITION - IEEFA
Clean energy alternatives are a crucial hedge against future disruptions in global commodity markets
Russia’s invasion of Ukra ...
Tuesday, 08 March 22
THE HIGH COST OF INDONESIA’S DOWNSTREAM COAL PROJECTS IS UNDERESTIMATED - IEEFA
Three Indonesian ministries have come up with a DME purchase price of US$378/tonne fixed for 20 years compared to IEEFA’s US$601/tonne estima ...
Wednesday, 02 March 22
SHIPPING MARKET INSIGHT - INTERMODAL
The escalating confrontation between Russia and Ukraine has the potential to disrupt global order and set the world back a few decades. While count ...
Tuesday, 22 February 22
THE DRY BULK MARKET HAS MOVED ON A POSITIVE TRACK - ALLIED
The dry bulk market has moved on a positive track as of the past couple of weeks or so. Following the typical softening in freight conditions durin ...
Tuesday, 22 February 22
CHINA'S DAILY OUTPUT OF COAL REBOUNDS TO OVER 12 MLN TONNES - REUTERS
China’s coal output returned to more than 12 million tonnes per day as of Feb. 20, the country’s state planner said on Monday, a level ...
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- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- The Treasury - Australian Government
- Minerals Council of Australia
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
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