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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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Thursday, 16 October 14
PANAMAX OWNERS RECEIVE A PREMIUM FOR GOING TO INDIA VIA INDONESIA - FEARNLEYS AS
Handy
The Handy/Supra market continues to slide in both hemispheres, said Fearnleys AS in its latest week report. In the Atlantic we see rates co ...
Thursday, 16 October 14
ARE WE GOING TO SHOOT OURSELVES IN THE FOOT ONCE AGAIN? - PANOS MAKRINOS
As the East part of our globe was coming back from its October holidays last week, everyone expected that the Dry Bulk market would follow suit and ...
Wednesday, 15 October 14
PANAMAX: ACTIVITY IN THE PACIFIC WAS UNIMPRESSIVE
The Dry Bulk market noted another weekly decline last week, while the BDI moved below 1,000 points taking down with it expectations that a post hol ...
Wednesday, 15 October 14
INDONESIAN COAL PRICE REFERENCE FELL TO FRESH MULTI-YEAR LOWS IN OCTOBER
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in October 2014.
...
Wednesday, 15 October 14
SHIPOWNER NOT LIABLE FOR CARGO DAMAGE RESULTING FROM POOR STOWAGE - CLYDE & CO
KNOWLEDGE TO ELEVATE
Russian metal trading company Yuzhny Zavod Metall Profil (YZMP), the holder of a CONGEN 1994 bill of lading, took delivery o ...
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- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- The University of Queensland
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- White Energy Company Limited
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
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