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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, 18 August 13
INDO - INDIA FREIGHT EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market was up this week with the BDI gaining more than 10 pct due to strong Cape Sector.
The BDI was closed at 1,102 p ...
Friday, 16 August 13
US COAL PRODUCTION SLIGHTLY UP ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.10 million short tons (mmst) of ...
Thursday, 15 August 13
CAPESIZE : TRENDS SOMETIMES SHIFT WITH NO PRIOR WARNING - FEARNRESEARCH
Handy
The influence of the summer holidays across Europe was felt in the Atlantic basin this week. Very little activity and a growing list of avail ...
Wednesday, 14 August 13
ANOTHER WEEK IN THE RED FOR DRY BULK CARRIERS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable- )
Another week in the red for Dry Bulk carriers with the market losing further steam as fewer an ...
Tuesday, 13 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMP 30.61 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 30.61 per cent week on week to 2.95 million mt for ...
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- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Australian Coal Association
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- PTC India Limited - India
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- The University of Queensland
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Economic Council, Georgia
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
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