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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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Monday, 25 October 21
A QUESTION OF POSSESSION - THE BALTIC EXCHANGE
Possession and tangibility are closely related concepts long established under English law. Yet a change to these concepts is around the corner. Th ...
Monday, 25 October 21
CHINA VOWS TO SEVERELY PUNISH MARKET VIOLATIONS AMID LOW COAL FUTURES PRICES - GLOBAL TIMES
Domestic coal futures had plunged for three consecutive trading days after the government vowed to crack down on soaring prices, and China’s ...
Monday, 25 October 21
FARMERS MAY JOIN THE COAL COMMODITY MARKET TO REDUCE RISKS - GLOBAL TIMES
A recent trip to by the Global Times to East China’s Shandong Province to get a glimpse of China’s coal supply chain revealed a surpris ...
Monday, 25 October 21
CHINA COAL PRICES MARK WORST WEEK SINCE MAY ON GOVERNMENT INTERVENTION - REUTERS
China’s thermal coal futures plunged on Friday and turned in their worst week in five months, following Beijing’s strongest interventio ...
Friday, 22 October 21
THE BIG PICTURE: ENERGY MARKETS - BREAK WAVE ADVISORS
The shipping markets have been pulled further into wild markets of coal and other energy sources. Given how nebulous this sector is, it’s alw ...
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- Mjunction Services Limited - India
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- GMR Energy Limited - India
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Australian Coal Association
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Marubeni Corporation - India
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
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