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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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Tuesday, 27 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMPED 15.59 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 15.59 per cent week on week to 2.76 million mt for ...
Monday, 26 August 13
CARRIAGE OF COAL CARGOES FROM KALIMANTAN, INDONESIA - WEST OF ENGLAND P&I CLUB
The Club has recently been advised by consulting scientists and engineers Dr J H Burgoyne and Partners (International) Limited that the number of in ...
Sunday, 25 August 13
API 8 CFR SOUTH CHINA COAL: HEADING TO NORTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 2.39 up month on month. The swap was moved positive ...
Sunday, 25 August 13
THE FREIGHT MARKET S7 & S8 SECTOR IS EXPECTED TO BE STEADY/FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market continued to be firm with all indices moved positive except for Panamax which was slightly down (2 pct down).
T ...
Friday, 23 August 13
US PRODUCED MORE COAL WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
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- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- The University of Queensland
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- PTC India Limited - India
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Minerals Council of Australia
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
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