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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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Thursday, 22 August 13
PANAMAX : PERIOD MARKET IS STILL BEING LED BY STRONGER SENTIMENT IN THE FFA'S - FEARNRESEARCH
Handy
This week started slowly as expected. Indo biz now rate APS around 7k +60k to china and around 8k+80k to India. However, there are some ships ...
Wednesday, 21 August 13
RATES FOR CAPES MOVED DECISIVELY NORTH THIS WEEK - INTERMODAL
COALspot.com - Right when the BDI seemed ready for another dive below the 1000 points level, the Dry Bulk market made significant comeback this week ...
Tuesday, 20 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS FALL 19.15 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 19.15 per cent week on week to 2.39 million mt f ...
Tuesday, 20 August 13
CAPESIZE RATES MORE SENSITIVE TO DEMAND - COMMODORE RESEARCH & CONSULTANCY
COALspot.com : Approximately 71.50 million tons of iron ore is now stockpiled at Chinese ports, 900,000 tons (-1%) less than a week ago, Commodore R ...
Sunday, 18 August 13
SUB-BIT FOB INDONESIA COAL SWAP : ON POSITIVE DIRECTION ON DAY, WEEK AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 1.83 up month on month. The swap was moved positive ...
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- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- White Energy Company Limited
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- GMR Energy Limited - India
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Planning Commission, India
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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