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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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Sunday, 08 September 13
BALTIC INDEX UP ON HIGHER CAPESIZE, PANAMAX RATES
COALspot.com : The freight market continued saw one of the biggest rally last week with Cape Size taking the lead followed by Panamax.
The BDI wa ...
Friday, 06 September 13
DRY BULK MARKET REACHES NEW YEAR-HIGHS ON THE BACK OF INCREASED CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been on the rise once again, but this time around any new increase of freight rates translates into new year-highs, thus bri ...
Friday, 06 September 13
US PRODUCED APPROXIMATELY 90.80 MMST OF COAL IN AUGUST
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.90 million short tons (mmst) of ...
Thursday, 05 September 13
INDONESIAN COAL EXPORTS UP BY 6.72 PERCENT IN JULY
COALspot.com: Indonesia, the world's largest multi grade coal exporter shipped 35.268* million tons of coal in July 2013. Indonesian coal exp ...
Thursday, 05 September 13
HANDY: NICKEL ORE WAS PUSHING THE FAR EAST MARKET - FEARNLEYS
Handy
Nickel Ore was pushing the Feast market, several ships were fixed from low teens to $14k. Indo/India was still supported by bauxite, while th ...
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- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- The University of Queensland
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
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