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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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Friday, 13 September 13
DIRECTOR GENERAL OF MINERAL AND COAL OF INDONESIA REVISED UP COAL PRICE REFERENCE TO US$ 76.89
COALspot. com - The Indonesian government has revised up its owned coal bench mark price by US$ 0.19/ MT to US$ 76.89 for September 2013 deliveries ...
Thursday, 12 September 13
PANAMAX : PACIFIC ROUNDS ARE NOW REPORTED BETWEEN USD 13K AND 15K PER DAY - FEARNRESEARCH
Handy
Nickel ore is a key support SE Asia/Feast rate at the moment; vessel in N.China were fixed around USD 11-12k, ships in mid China can expect a ...
Thursday, 12 September 13
CAPESIZE MARKET WILL BECOME EVEN TIGHTER - JEFFREY LANDSBERG
COALspot.com : While it is no secret that current capesize availability has become tight and has caused capesize rates to surge, availability is set ...
Thursday, 12 September 13
OVER THE WORST? WE MIGHT FIND OUT THIS WEEK - BIMCO
The shipping market has a spring in its step, even as summer draws to a close. There is it seems, confidence that finally, we are emerging into the ...
Thursday, 12 September 13
DRY BULK MARKET RALLY COMES AT A GOOD TIME FOR MOST SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest surge of the dry bulk market has helped offset other lingering factors, which otherwise, could have plunged freight rates to new lows. Fo ...
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- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Bhatia International Limited - India
- VISA Power Limited - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
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