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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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Wednesday, 13 October 21
MARKET INSIGHT - INTERMODAL
Following up on our insight on May 2021, where we discussed about the Capesize market outlook for the second half of the year, we are pleased to se ...
Wednesday, 13 October 21
FBX INDEX: THE IMPOSSIBILITY OF SHORT-TERM FORECASTING - LARS JENSEN
Will freight rates on Asia-Europe or the Transpacific reach 40.000 USD/FFE in the run-up prior to Chinese New Year 2022? Or will they start droppin ...
Wednesday, 13 October 21
CHINA FLOODS: COAL PRICE HITS FRESH HIGH AS MINES SHUT - BBC
The price of coal used in China’s power plants has surged to a new record high as another of the country’s key mining regions is hit by ...
Tuesday, 12 October 21
BUMA SIGNS CONDITIONAL AGREEMENT FOR AUSTRALIAN ASSET ACQUISITION
PT Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama, through its newly incorporated Australian subsidiary, BUMA International Pty ...
Tuesday, 12 October 21
INDONESIA'S COAL-BASED POWER PLANTS ARE SUBJECT TO CARBON TAX NEXT YEAR, ELECTRICITY COSTS COULD RISE! - CNBC
The Indonesian government is planning plans to implement a carbon tax of IDR 30 per kilogram (kg) of carbon dioxide equivalent (CO2e) or equivalent ...
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- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Australian Coal Association
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Economic Council, Georgia
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Thai Mozambique Logistica
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
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