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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, 14 December 21
COAL LOCK-IN IN SOUTHEAST ASIA PRESENTS A CHALLENGE FOR THE ASIAN DEVELOPMENT BANK'S COAL RETIREMENT PLAN - IEEFA
In August, the Asian Development Bank (ADB) announced an ambitious plan to buy high emissions coal-fired power plants in Southeast Asia and retire ...
Saturday, 11 December 21
BUNKER BUYERS LOSE UP TO $5/MT FOR NOT COVERING ENOUGH SUPPLIERS - INTEGR8 FUELS
With the Brent price recently touching the $80 mark and before the Omicron variant concerns pushed it lower, bunker prices reached levels not seen ...
Tuesday, 07 December 21
SUPERCYCLE DEMAND: ARE WE THERE YET? - WOOD MACKENZIE
Taking young children on a long journey is fraught with challenges, not least the inevitable question a few minutes after leaving: are we there yet ...
Tuesday, 07 December 21
COAL WOULD REMAIN ENERGY LEADER FOR AT LEAST 15 YEARS - LIVEMINT
Coal India Ltd (CIL) has been in the eye of the storm after fuel stocks at coal-fuelled power plants depleted in October. Fuel stocks since are bei ...
Tuesday, 07 December 21
GLOBAL SHIPPING OUTLOOK TURNS STABLE FROM POSITIVE ON THE BACK OF PEAKING EARNINGS DURING 2021 - MOODY'S
The outlook for the global shipping industry is changed to stable from positive for the next 12 to 18 months due to demand slightly outstripping su ...
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- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Marubeni Corporation - India
- PTC India Limited - India
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- The University of Queensland
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
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