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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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Monday, 16 September 13
WHAT RECOVERY MEANS FOR THE CAPESIZE MARKET - COMMODORE RESEARCH
COALspot.com: The simple fact that capesize rates have been able to increase above the $9,000/mark and become much more responsive to changes in car ...
Monday, 16 September 13
CFR SOUTH CHINA COAL SWAP: STABLE TO STEADY
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 ...
Monday, 16 September 13
INDONESIAN SUB-BIT COAL SWAP STRUGGLING TO FINDS THE RIGHT PATH
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery down 0.75 percept month on month on Friday 13 Septe ...
Sunday, 15 September 13
CAPE FREIGHT RATES RISE ON HIGH DEMAND AND TIGHT AVAILABILITY - CAPT. REDDY
COALspot.com : The BDI, Cape and Panamax indices are continued to rise and saw a steep surge with average index in these segments up around 25 pct w ...
Friday, 13 September 13
US COAL OUTPUT SLIPS 3.34% ON-WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.20 million short tons (mmst) of ...
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- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
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