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