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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, 27 January 22
2022 - A YEAR OF REBALANCING FOR METALS AND MINING - WOOD MACKENZIE
If 2021 was the year of rebound for metals and mining (M&M) commodities, then 2022 is shaping as the year of rebalance, says Wood Mackenzie, a ...
Wednesday, 26 January 22
MARKET INSIGHT - INTERMODAL
While it is logical that most of the S&P reports of the first weeks of the year are linked to very limited activity as reflected in the weekly ...
Wednesday, 26 January 22
INDONESIA: DME PROJECT IS ECONOMICALLY VIABLE AS STUDY DEMONSTRATES
The government is encouraging downstream coal processing or increase in coal added value, for example by turning coal into Dimethyl Ether (DME) to ...
Wednesday, 26 January 22
COMMODITY PRICES COULD SOAR IF THE RUSSIA-UKRAINE CRISIS ESCALATES - ING
It appears that a number of commodity markets are starting to at least price in some geopolitical risk around the growing tension between Russia an ...
Wednesday, 26 January 22
INDONESIA'S COAL BAN SENDS PRICES SOARING, OTHER EXPORTERS FAIL TO STEP UP - REUTERS
Indonesia’s short-lived ban on exporting coal has sent ructions through the seaborne market for the fuel in Asia, with the fallout likely to ...
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- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- CNBM International Corporation - China
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- White Energy Company Limited
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Australian Coal Association
- Indika Energy - Indonesia
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- The University of Queensland
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
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