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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, 08 September 21
MARKET INSIGHT - INTERMODAL
Last August was extremely hot in the dry bulk market with rates rising at levels that we have years to witness. The dry bulk index exceeded the 4,0 ...
Wednesday, 01 September 21
KOMIPO TO BUY 1.56 MILLION TONS OF 5600 NAR COAL OF AUSTRALIA OR SOUTH AFRICAN ORIGIN FOR 2022 - 2024
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
Wednesday, 01 September 21
MARKET INSIGHT - INTERMODAL
As the summer season is coming to an end, the dry bulk market continues to rally. The confidence that the outstanding freight market performance ha ...
Monday, 30 August 21
68% OF U.S. COAL FLEET RETIREMENTS SINCE 2011 WERE PLANTS FUELED BY BITUMINOUS COAL - EIA
In 2011, the United States had 317.6 gigawatts (GW) of coal-fired electric generation capacity. About 88.7 GW of that capacity was retired in the d ...
Friday, 27 August 21
ALL YOU NEED TO KNOW ABOUT COAL'S MASSIVE RALLY AND NEAR-TERM OUTLOOK - CNBCTV18
Australia’s thermal coal at Newcastle Port, the benchmark for the vast Asian market, has surged over 100 percent this year to trade above $16 ...
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- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
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