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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, 26 September 13
INTERCARGO PUBLISHES BENCHMARKING BULK CARRIERS 2012-13 REPORT
The International Association of Dry Cargo Shipowners (Intercargo) has today launched Benchmarking Bulk Carriers 2012-13, the latest edition of our ...
Thursday, 26 September 13
DRY BULK MARKET KEEPS ON RALLYING ON THE BACK OF HIGH CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its momentum over the course of the past week, on the back of increased demand for Capesizes and an improvement of mark ...
Wednesday, 25 September 13
RBCT'S COAL EXPORT DECLINES IN AUGUST
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest coal export terminal in South African as well as in the world has shipped 16. ...
Wednesday, 25 September 13
CAPES TOUCHING RATES NO ONE BELIEVED COULD BE ACHIEVED IN 2013 - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market is the gift that keeps on giving these days. With rates for Capes touching numbers ...
Wednesday, 25 September 13
IS IT TIME AGAIN TO SUPERSIZE AGAIN? - GEORGE LAZARIDIS
After an early arrival of the seasonal rally in the Capesize market, things look to be on the upbeat for these dry bulk giants. With the Index reach ...
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- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Africa Commodities Group - South Africa
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