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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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- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Australian Coal Association
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Marubeni Corporation - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- The University of Queensland
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
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