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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, 04 February 22
RENEWABLES ON THE RISE, COAL CONTINUOUSLY FALLING - EUROPEAN COMMISSION
Although oil (34.5%) and natural gas (23.7%) were still the most important fuel sources in the EU energy mix in 2020, renewable energy’s shar ...
Thursday, 03 February 22
COAL SHORTAGE NOW AT ALARMING LEVELS, SAY ALUMINIUM PRODUCERS - IANS
With no relief in sight despite coal stocks running critically low and production disruptions looming across the Indian aluminium sector, the Alumi ...
Wednesday, 02 February 22
HIGH COKING COAL PRICES PROVIDE GLIMPSE INTO STEELMAKING'S FUTURE - MCKINSEY
Last year was a volatile one in global commodity markets. Demand for coking coal, an essential raw material in the production of steel, was extreme ...
Wednesday, 02 February 22
INDONESIA'S RESTRICTIONS ON COMMODITIES RATTLE MARKETS, MORE MOVES LIKELY - REUTERS
In just the first month of this year, Indonesian policymakers have rattled global markets with restrictions on some of its biggest commodities expo ...
Wednesday, 02 February 22
CHINA'S TOP COAL PRODUCER FORECASTS 28 PCT PROFIT GROWTH IN 2021 - XINHUA
China Shenhua Energy Company Limited, one of the country’s biggest coal producers, said its net profits are expected to jump by 28 percent in ...
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- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Marubeni Corporation - India
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- PTC India Limited - India
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Parliament of New Zealand
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
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