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Wednesday, 21 August 13
DRY BULK SHIPPING - POSITIVE WINDOW FOR CAPESIZE OWNERS - PETER SAND
 By: Peter Sand, Chief Shipping Analyst, BIMCO
Demand:
“Expect the unexpected from the dry bulk market” was what we wrote last time around and what we got – but did not anticipate. As the Summer heat arrived, Capesize owners found themselves basking in the sun. Average earnings for Capesize vessels went from USD 6,000 per day to USD 12,000 per day in less than two weeks. The momentum lifted rates as high as USD 15,218 per day on 1 July. This was a sizeable and very welcome surprise as the combination, once again, of vessels being at the “right place at the right time” proved to be profitable. As Brazilian iron ore exports in particular jumped after some weaker months, congestion at load ports rose and charterers were left searching for prompt and available tonnage. At the same time, Australian iron ore ports were hit by heavy rainfall which also affected shipping. It is a little miracle that tight situations can still appear and push up freight rates, in spite of tonnage being abundant in the market. Since the 1 July peak, freight rates have slid slowly, as the imbalanced market is smoothed by ballasting tonnage returning to the Atlantic from the Far East. Some of the weakness in most of H1 is due to the fact that Brazil has been losing some of its share of the iron ore market to Australia.
Besides that, the market is affected by falling commodity prices (iron ore, steel and coal). This could, in theory, positively affect shipping demand if consumers and traders take advantage of it and stock up, but it may as well mirror a fundamental slowdown in demand.
No slowdown is seen in steel production fortunately, at Chinese steel production went up by 9.2% in the first half as compared to same period last year. Iron ore imports “only” went up by 4.8% in the same period of time. Both indicators are positive for shipping demand. Traditionally, Chinese iron ore demand is stronger in the second half of the year; this could build a case for stronger rates in the larger segments in Q3 and Q4 if this seasonality is repeated.
The larger production of steel and moderate consumption of same has put steel prices under pressure. Falling steel prices are normally quite worrying for the dry bulk sector. In the wake of several months with record high steel production, prices weakened continuously, getting quite close to the threateningly low levels of August/September 2012. But has the scare just evaporated with the latest pick up in prices toward the end of July? That is still too early to call despite the optimism in most recent “official” China manufacturing PMI report.
Supply:
During the past two months, 10 million DWT of new tonnage has joined the dry bulk fleet, which now totals at 704 million DWT. This is up by 3.6% since 1 January.
Looking at future delivery prospect, 70% of all new orders placed during the past two months have been for 2015 delivery. In addition to some postponements, this has pushed the projected orders for 2015 delivery up from 20 million to 25 million DWT.
For 2013, BIMCO projects new tonnage of 70 million to hit the water, a four-year low, and a gradual return to a lower supply pressure on the market.
While new orders have been fairly equally distributed for the past two months as a whole, June saw a flurry of Supramax orders whereas July was pretty biased towards Capesize vessels. As a lot of Panamax ships are currently being delivered into an oversupplied market, owners showed only little appetite for placing new orders for Panamax ships.
In total, the dry bulk order book has grown by 3.2 million DWT during the recent two months. It now stands at 126 million DWT. It’s the first time in more than two and a half years that the order book has increased, on its way down from 300 million DWT highs at the end of 2010.
As 29 million DWT of new vessels have been ordered so far in 2013, the total has already surpassed that of the full year 2012. This development seems to have stopped the slide of new building prices, which are now seen to be on a slow rise, with the exception of Panamax new building prices which are still flat, as demand does not support higher prices in this segment yet.
Outlook:
As the global and Chinese GDP are now seen lower than earlier in the year, we also have to settle for something that might be the sixth consecutive year of supply outpacing demand. But the race is still on, as supply is set for 5.7% and demand for 5-6%.
China’s import of agricultural products could provide some upside, as wheat and soybeans could end up falling short of demand due to adverse weather conditions. If imports of wheat are supplied predominantly by US producers, which is likely, this may bring some growth in demand due to long sailing distances. The same effect can be expected by increased Brazilian exports of soybeans in the second half of the year following a congestion-affected export level in the January-May period.
In recent months, Asian thermal coal prices have nose-dived, as plenty of coal is offered in the market. Utilities are no longer worried about running stocks low, as supply is excessive. During the second quarter, Russian, Columbian and American coal was also offered into the market, putting further pressure on traditional Indonesian and Australian coal markets. FOB thermal coal prices for “Newcastle 5500” or “Richards Bay 5500” were just above USD 66 per Mt coming down from USD 75 per Mt and USD 72 per Mt respectively. As we know, demand is healthy, the lower prices could prove a catalyst for higher freight rates as we move further into Q3. Further weakening of the Indian Rupee or the Japanese Yen could dampen the positive effect somewhat.
To sum up, our forecast for the coming 2 months:
BIMCO holds the view that Capesize TC average rates are expected around USD 8,000-13,000 per day.
Panamax is expected to stay in the USD 6,000-9,000 per day interval.
For the Supramax segment, BIMCO forecasts freight rates in the USD 8,000-11,000 per day interval,
whereas Handysize rates are forecast to show limited volatility in the interval of USD 6,500-9,000 per day.
Source: BIMCO Peter Sand Chief Shipping Analyst / Hellenic Shipping
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Thursday, 10 October 13
SEVERAL PANAMAX FIXTURES FOR 1 YEAR TC HAVE BEEN REPORTED AROUND $13.5K/DAY - FEARNRESEARCH
Handy
The market is not much fancy as several holidays in the Far East last week. Tonnage side seems tight in SE Asia but there are many of them in ...
Wednesday, 09 October 13
PANAMAX: FIRM ; FIXING ACTIVITY INCREASED IN BOTH BASINS - INTERMODAL
This was another week of gains for the Dry Bulk market, albeit very modest ones compared to the previous ones. Charterers and owners struggled for t ...
Tuesday, 08 October 13
CHINA: INTENSE COMPETITION AMONG DOMESTIC COAL MINERS AS 2013 IMPORT DEMAND REMAINS STRONG - WOOD MACKENZIE
Prices will not fall under RMB500/t or risk supply availability to the coastal market
Despite China's lower economic growth, Wood Mackenzie says ...
Monday, 07 October 13
RICHARD BAY COAL TERMINAL SHIPPED 49.94 MMT OF COAL YTD
COALspot.com - Richards Bay Coal Terminal (RBCT), the world's single largest coal terminal has shipped 49,946,509 mt of coals YTD, according to por ...
Monday, 07 October 13
SOUTH AFRICA'S RBCT SHIPPED 7.94% MORE COAL IN SEPT' 13
COALspot.com - Richards Bay Coal Terminal (RBCT), the single largest coal export terminal in South Africa as well as in the world has shipped 7.94 p ...
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- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
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