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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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Thursday, 26 June 14
COAL DIVESTMENT CAMPAIGNS COME WITH RISKY UNINTENDED CONSEQUENCES - WCA
Last week I presented to the Expert Group on investments in coal and petroleum companies, the body set up to advise the Norwegian Government on whe ...
Wednesday, 25 June 14
INDONESIAN COAL EXPORTS ON RISE; EARNINGS FALL ON LOWER SELLING PRICES
COALspot.com: Indonesia, one of the world's largest coal producer and the global largest multi grade coal exporter shipped around $1.84* ...
Wednesday, 25 June 14
THE PANAMAX MARKET REACHED FRESH LOWS FOR THE YEAR, SAYS INTERMODAL
COALspot.com: The Dry Bulk market closed off the week noting a slight decrease, but this image of stability is merely representative of freight rat ...
Wednesday, 25 June 14
SHIPPING: MARKET INSIGHT - YANNIS OLZIERSKY
During his recent visit in London, China's Premier, Li Keqiang, announced that China's economy, the world's second largest after the US ...
Tuesday, 24 June 14
INDONESIAN COAL MINER TARGETS RP 313 BILLION IPO
COALspot.com: Indonesian coal miner PT Mitrabara Adiperdana is aiming to raise up to Rp 313 billion to Rp 368 billion (approximately $26.133 millio ...
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- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Australian Coal Association
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- The University of Queensland
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- White Energy Company Limited
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
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