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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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Monday, 12 August 13
GBCE SUCCESSFUL IN UPGRADING LOW RANK INDONESIAN COAL ON INDUSTRIAL SCALE
COALspot.com : GB Clean Energy Ltd. (GBCE) has annoused that, the company has successfully upgraded 2,426 tonnes of low rank 4,018 kcal NAR Ind ...
Monday, 12 August 13
INDIA - SAFE SHIPMENT OF IRON ORE FINES FROM INDIAN PORTS - WEST OF ENGLAND P&I CLUB
As Members may be aware, in 2009 two ships, the ‘Asian Forest’ and the ‘Black Rose’, capsized and sank following the liquefa ...
Sunday, 11 August 13
INDONESIAN COAL SWAPS : FLAT ON DAY
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery flat on day due to holidays in Indonesia, Malaysia & ...
Sunday, 11 August 13
SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA CONTINUED TO BE SOFT - VISTAAR
COALspot.com : The freight market was soft this week with all indices down , the reason could be long weekend holidays in Indonesia, Singapore and M ...
Saturday, 10 August 13
MOODY'S: OUTLOOK FOR US COAL INDUSTRY CHANGES TO STABLE FROM NEGATIVE
Moody's Investors Service has changed its outlook for the US coal industry to stable from negative, the rating agency says in a new report, "U ...
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- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
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