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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, 01 September 13
INDONESIA TO INDIA SPOT FREIGHT STAYS FIRM THIS WEEK - VISTAAR
COALspot.com: The freight market continued to be firm with even though the BDI and Cape index dropped by about 3 pct week on week.
The BDI was do ...
Friday, 30 August 13
US COAL PRODUCTION FELL 0.48 PERCENT WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.70 million short tons (mmst) of ...
Thursday, 29 August 13
HANDY: THE PACIFIC MARKET STARTED HEALTHY THIS WEEK - FEARNRESEARCH
Handy
The Pacific market started healthy this week. We have seen many bauxite, iron ore and few coal fixtures. Ships passing Singapore were able to ...
Thursday, 29 August 13
NO RATING IMPACT ON INDONESIAN ENERGY COMPANIES FROM RUPIAH DEPRECIATION - FITCH RATINGS
Fitch Ratings says the credit profiles of rated Indonesian energy and utilities companies, including thermal coal producers, will largely remain una ...
Wednesday, 28 August 13
THE BDI HAS MOVED TO LEVELS CONSIDERABLY STRONGER THAN THE BEGINNING OF THE YEAR - INTERMODAL
By George Bassakos
SnP Broker - Intermodal
We have already reached the end of August and whilst students are preparing themselves for another sc ...
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- Planning Commission, India
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- White Energy Company Limited
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
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