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Tuesday, 17 June 14
DRY BULK FREIGHT RATES TO RISE DURING THE SECOND HALF OF 2014, AS CHINA IS EXPECTED TO START IMPORTING MORE IRON ORE FROM BRAZIL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 In its latest analysis of the dry bulk market, BIMCO said that it doesn’t expect freight rates to react significantly to increased demand before China starts taking more iron ore from Brazil, most likely during the second half of the year,. As a result, BIMCO said that “our forecast for June/July: BIMCO believes that the level of Capesize TC average rates will stay around USD 12,000- 22,000 per day. Panamax TC average rates will feel the supply pressure and stay around USD 4,000-9,000 per day. For the Supramax segment, BIMCO forecasts freight rates in the USD 7,000-12,000 per day interval, whereas Handysize freight rates are expected around USD 6,000-8,500 per day.
According to the market outlook, “a trend has been developing over some years now and going forward, more of the same is expected. This trend is a continued Asia-biased dry bulk market, where China is completely dominant, dwarfing the slow but steady Indian import growth, while the rest of the world only grows imports slowly. Moreover, the trend in commodities became increasingly focused on coal and iron ore trades that are taking an even larger share of the pie going forward. This trend favours the larger bulkers. As the big mines in Australia and Brazil have scaled up iron ore output significantly in 2014 and will do so in the coming two years, the price of the commodity has been under pressure.
Such a development should benefit international trading at the expense of China’s higher-cost, domestically-produced iron ore of poorer quality. Is that what is happening? Yes and no. China has increased its iron ore imports significantly (up by 21% in the first four months of 2014 from a year on) as good merchants buy at the right price, but domestic production keeps up (so far) despite the obvious cost pressure. They are doing so at a very steady level seen during the past 5 years. Conclusion: Don’t expect China to become 100% reliant on imports while enjoying the lower market price. The current iron ore price is around USD 90 per ton, down from 130-140 per ton in H2-2013″, BIMCO noted.
According to BIMCO’s Chief Shipping Analyst, Mr. Peter Sand, the first half of 2013 “was a low and flat freight rate environment, so in that sense so much more has happened in 2014. Normally, volatility is good for operators, but when the past two months have been flat, there is only some comfort in knowing that the year-to-date BDI average is up by 51% (end-May). Below the surface, Capesize earnings are up by 158% to USD 14,504 per day, Panamaxes up by 22% (to USD 9,208 per day), Supramaxes up by 28% (to USD 10,906 per day) and Handysizes up by 26% (to USD 9,181 per day), he noted.
Supply wise, BIMCO’s report said that “the dry bulk fleet has grown by another 121 ships in the past two months (0.9% in DWT). The expansion has been easy in the Capesize segment, with only 10 new deliveries, as compared to roughly 30 new ships flowing into each of the other three sub-segments. For the full year, our estimates have been slightly upwardly adjusted, now to reach 52 million DWT of newbuilt deliveries, meaning that the fleet will grow by 5.3% (up from 49 million DWT).
Order-book activity has been slowing down since January. The order book now holds 1,989 ships (163.4 million DWT) for future delivery and is still heavy on the Panamax side. One hundred and nine ships had left the fleet by the end of May 2014, equal to 6.6 million DWT. During the first five months of 2013 no less than 12.2 million DWT left the fleet. BIMCO remains firm on the forecast of 14 million DWT to be sold for demolition for the full year, significantly down from last years’ 22.2 million DWT. Demolished tonnage is only marginally younger on average this year. With expectations of improved markets just around the corner, BIMCO forecasts lower levels of demolition for the coming years as well”, the report noted.
It added that “the Handysize fleet started to grow again in April, following nine successive months of contraction. The total Handysize fleet remains shy of the record 89.17 million DWT fleet size in 1985, currently at 87.8 million DWT. BIMCO forecasts the Handysize fleet to grow slowly and thus remain South of the record size in 2014 and potentially in 2015 too.
In opposition to this is the Panamax segment, which with little hesitation, sets a new fleet size record every day. Currently growing at 8.7% on a year-on-year basis, standing at 191 million DWT at the end of May, the 200 million DWT fleet size threshold is likely to be reached before year-end”, BIMCO said.
Demand
Demand-wise South American grain exports finally got under way. According to BIMCO, “the lower export figures from April being only on a par with 2012 illustrates the delayed take-off in shipments. Brazil has been the major exporter during Q2, while Argentina delivered more steadily throughout Q2 and Q3. Ship broking company SSY expects a combined 35.8 million tons (mt) of soya exports in Q2, with 30.8 mt in Q3.
The strength of the current upturn depends on Asia’s appetite, as all growth stems from that region. The Atlantic basin has been awash with ships during most of 2014, putting downward pressure on freight rates for Panamax and Supramax ships in particular. Freight rates for a trans-Atlantic round-voyage, which were hitting a three-year high by mid-December 2013 (USD 20,500 per day), subsequently experienced four straight months of losses to hit USD 2,500 per day for Panamaxes. Since mid-April, Panamaxes have tripled earnings on the back of demand, finally meeting expectations. Supramax ships are still in the doldrums, failing to follow suit with big brother so far.
The optimism built up in H2-2013 has all but evaporated. BIMCO still expects stronger earnings as we enter into H2-2014, but the world fleet is capable of catering to a much higher level of demand than it does today. This is what makes the road forward full of air pockets, with owners and operators trying to hit the optimum speed in a quest to utilise their ships better”, BIMCO concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Wednesday, 02 July 14
THE PANAMAX MARKET CONTINUED TO BLEED FOR ANOTHER WEEK - INTERMODAL
COALspot.com: The Dry Bulk market succumbed to mounting pressure this past week, while the Capesize market proved unable to “save the day&rdq ...
Wednesday, 02 July 14
HANDY BULKERS PROVE TO BE THE MOST SOUGHT AFTER VESSELS OVER THE PAST WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The Handy dry bulker proved to be the most sought after ship by ship owners active in the second hand market, which saw a slight decline in terms o ...
Wednesday, 02 July 14
SHIPPING: MARKET INSIGHT - GEORGE DERMATIS
After 6 months, 57 ministerial meetings and 67 political agreements, the journey of the Greek Presidency in the EU reached its end yesterday; only ...
Tuesday, 01 July 14
INDIAN POWER PLANT COAL STOCKPILES VERY LOW
COALspot.com: According to today's Weekly Dry Bulk Report published by Commodore Research, Indian power plant coal stockpiles have now fallen t ...
Monday, 30 June 14
SUB-BIT FOB INDONESIA COAL PRICES ARE STILL STRUGGLING TO RECOVER
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on week and on month according to AsiaClear OTC coal swap's reports release ...
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- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- White Energy Company Limited
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- PTC India Limited - India
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
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