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Wednesday, 15 October 14
DRY BULK SHIPPING: RATE IMPROVEMENTS ARRIVED AS FORECAST, BUT UNCERTAINTY MOUNTS FOR 2015 DEMAND - BIMCO
 BIMCO released its latest short term assessment of the dry bulk market, estimating that over the October-November period, the level of Capesize TC average rates will rise from the current level below the USD 10,000 per day mark. Once the belated, but still anticipated, rush of Brazilian iron ore spot cargoes enter the market, freight rates should be volatile around USD 8,000-23,000 per day. Panamax TC average rates will remain around USD 5,000-10,000 per day. For the Supramax segment, BIMCO forecasts freight rates in the USD 8,500-13,500 per day range, whereas Handysize freight rates are expected around USD 6,500-9,500 per day.
According to the report, “while we await the long-anticipated rebound in Capesize freight rates centred on Brazilian exports, let’s focus on the brighter spots elsewhere in dry bulk shipping. Panamax freight rates are dragging along, as the oversupply is still clearly felt in the freight market. Fortunately, the erratic movements have now been mostly upward since the bottom-out on 27 June at USD 3,362 per day. Since then, freight rates have more than doubled to USD 7,101 per day, but this is still very different from delivering healthy earnings to owners and operators as the present ones are barely covering OPEX.
Supramaxes and Handysizes live a less volatile life than their larger peers do, and the rebound is clearly felt and seen, moving from the lower end of BIMCO’s forecast freight rate interval to the top for Handysizes, with Supramaxes still firming to close the gap completely.
Freight rates for all four segments have performed as forecast in our last report; a positive development without fireworks. The only disappointment was the fact that Capesize freight rates only reached USD 17,670 per day on 10 September and have since then slid down to USD 11,000 per day”.
BIMCO’s Chief Shipping Analyst, Mr. Peter Sand added that “the development in the sub-Capesize ship sizes mirrors very well what we have experienced in terms of demand. The weak development of coal cargoes into China has given some softness to the Panamax market, with Indian imports failing to make up for all the lost demand. In the meantime, the Supras and Handies have both benefitted from the strong demand for minor bulks. On top of that, we have surging Indian coal imports up by 19% year-onyear to 16 million tonnes in September, as busy power companies went on a buying spree at low international prices. The grain export season is also up and running now across the northern hemisphere. Even the exports of wheat and barley from Ukraine have contributed positively to the market, despite the difficult situation Ukraine is facing due to the stand-off with Russia. Russia’s exports of the same commodities are also very high and projected to hit record levels this year as the season progresses. Russian exports in August were at a record high of 4.2 MT according to USDA, as seasonality spikes exports. In Ukraine, exports are strong too at 3.3 MT in both August and September, according to BIMCO data.
SUPPLY
In terms of supply, BIMCO noted that “the dry bulk carrier fleet has grown by 3.6% in the first nine months of the year – 37.8 million DWT (486 units) have been delivered, offset by 11.5 million DWT (213 units) being demolished. One-third of the total added capacity came in the form of 66 Capesizes and 1 Valemax. In addition to that, 144 Panamaxes, 150 Supra-/Handymax and 125 Handysizes entered the active fleet. BIMCO forecast the total level of newbuilt deliveries for 2014 to reach 55 million DWT, with the current forecast for 2015 heading for a slightly lower level than that. Since our last report, the order book for 2016 has built up to reach 60 million DWT. With demolition expected to remain somewhat unchanged, this will again increase the pressure on the fundamental supply-demand balance as the fleet could expand by almost 6% again, up from 5.2% projected for 2015. Fortunately, the newbuilding contracting activity has been more subdued in 2014 as compared to the rush of 2013, where 102 million DWT of new orders were placed. At the beginning of October 2014, the year-to-date contracting volumes stood at exactly half that of the full year 2013. 2014 is therefore heading for a significant slowdown from 2013, but still a level that does not support an improved market balance going forward unless it is combined with a strong demolition activity, which BIMCO does not expect to happen”.
Outlook
Meanwhile, “the poor state of the freight market has naturally also affected asset values in a negative way. At the beginning of October 2014, Capesize ships made most of the gains from the early parts of the year, while the three smaller segments are in the red by 7% to 20% – the older the ship the bigger the lost value as assessed by Vesselvalue.com. Uncertainty mounts around the future imports of coal into India. This follows the ruling by India’s Supreme Court to deem illegal 214 out of 218 coal-block licences allocated to various companies from 1994-2010, of which 42 are being worked. Following a six month grace period given prior to the closing of the mines, only four could potentially continue operations. Should this become reality, significant seaborne imports will follow once the stockpiles have been run down. Nevertheless, it is too early to know if only four mines will continue to operate beyond 24 March 2015. Imports are likely to come from South Africa, as India favours the higher quality to the higher ash content (23%) coal imports from Australia, which is seeking new buyers, with China potentially shying away from imports of thermal coal with an ash content higher than 16% from 1 January 2015″.
According to the report, “these are two wild cards for the seaborne coal trade next year if implemented as described. The oversupply of iron ore into the market has dragged prices to the floor. In September 2014, iron ore prices reached a five-year low for 62% Fe content delivered at Qingdao, China, as it went below USD 80 per tonnes. This low level does not reflect poor demand conditions for iron ore or lower steel production in China, which is up by 5% in the first eight months of 2014. However, the lower iron ore prices may push forward a higher Chinese import level, as domestic production can be squeezed out because of higher production costs, as well as lower commodity prices tending to spur increased seaborne demand”, BIMCO concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Wednesday, 22 October 14
CAPESIZE MARKET REMAINED UNDER PRESSURE
COALspot.com: The Dry Bulk market closed on the red for yet another week although following Friday sentiment has started to improve on the back of ...
Tuesday, 21 October 14
INDIA'S DIESEL DEREGULATION POSITIVE FOR OIL COMPANIES - FITCH
The Indian government's 18 October decision to deregulate diesel prices will have a positive effect on the national oil marketing companies tha ...
Tuesday, 21 October 14
LOW DEMAND PUTTING COAL SWAPS UNDER PRESSURE
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost on day, week and month.
The swap has lost US$ 1.57 (-3.04%) month on month ...
Monday, 20 October 14
CHINA'S ENVIRONMENTAL POLICIES DO NOT SPELL THE END FOR COAL - WOOD MACKENZIE
China's environmental policies do not spell the end for coal Analysis across energy commodities show coal still accounting for 64% of power mix ...
Monday, 20 October 14
CFR SOUTH CHINA COAL SWAPS FAILED TO PERFORM POSITIVE
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery decreased US$ 3.04 (-4.57%) month over month and US$ 1.75 (-2.68%) week o ...
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- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- The University of Queensland
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
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