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