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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, 18 September 13
DRY BULK MARKET CONTINUED TO ADVANCE - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market continued to advance at a very fast pace, with the BDI closing off the week north ...
Tuesday, 17 September 13
BUMA PRODUCED 3.57 PERCENT MORE COAL IN AUGUST
COALspot.com: BUMA has removed totaled 25.20 million bcm of overburden to produce 2.90 million tons coal in August 2013. BUMI produced 3.07 percent ...
Tuesday, 17 September 13
NEWCASTLE PORT SHIPPED ABOUT 27 PERCENT MORE COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 27.26 per cent week on week to 3.01 million mt for ...
Tuesday, 17 September 13
TAIPOWER INVITES BIDS FOR SUPPLY OF SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 1.050 million tons of sub-bituminous coal for Taipower thermal power plant through open tende ...
Tuesday, 17 September 13
ORPHEUS SECURES SIGNIFICANT INFRASTRUCTURE DEAL THROUGH ACQUISITION OF SOUTH KALIMANTAN PORT CAPACITY
COALspot.com : Orpheus Energy Limited (ASX: OEG) of Australia has today announced that, it has executed a binding agreement with the proprietor of S ...
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- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- The Treasury - Australian Government
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Minerals Council of Australia
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
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