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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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Wednesday, 02 October 13
HOW LONG WILL THIS LATEST CAPESIZE RALLY LAST? - TASOS PAPADOPOULOS
By Tasos Papadopoulos, SnP Broker, Intermodal
The surge in iron ore trade has translated into a massive boost in daily earnings for capes; with t ...
Tuesday, 01 October 13
DRY BULK MARKET POISED FOR RETREAT ON CHINA HOLIDAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The start of a national weeklong in China as of Tuesday is expected to put a lid in the latest rally of the dry bulk freight market, as has always b ...
Monday, 30 September 13
NEWCASTLE'S COAL EXPORT VOLUME CONTINUES TO SLIP
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 8.38 per cent week on week to 2.67 million mt fo ...
Monday, 30 September 13
PANAMAX CHARTER RATES TOUCHING US$ 18K FOR A TRIP TO NOPAC - CAPT. REDDY
COALspot.com : The freight market continued to remain firm, BDI and the Panamax index up week ended 27 September 2013.
The cape index was fell to ...
Sunday, 29 September 13
API 8 CFR SOUTH CHINA COAL Q3 2014 DELIVERY SWAP GAINED $1.19 M-O-M
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
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- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- The University of Queensland
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
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