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