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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, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
Several factors have aligned over the past two years to create a robust and profitable market for tanker owners, which is expected to drive newbuil ...
Friday, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
In the final days of February, the dry bulk freight market appeared to maintain a relatively stable momentum, particularly evident in the large ves ...
Friday, 23 February 24
RUSSIAN COAL SHIPMENTS FALL 14% AS SANCTIONS BITE - BIMCO
During the first seven weeks of 2024, Russian coal shipments have fallen 14% y/y. Volumes have gradually declined since October 2023 when logistica ...
Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can e ...
Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
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- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- MS Steel International - UAE
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
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