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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, 15 October 14
NEWCASTLE SHIPPED 13.96 MILLION TONS OF COAL IN SEPTEMBER; UP 5.72%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1,227.7 wor ...
Tuesday, 14 October 14
KING COAL UNDER ATTACK? - EVA TZIMA
With the last quarter of the year being well underway and with no strong signs that the Dry Bulk market could be ready for a big positive reversal, ...
Tuesday, 14 October 14
THE NEW CHINESE TRANSPORTATION TAX LAW: WHAT DOES IT MEAN FOR GREEK SHIPPING? - DELOITTE
China has recently promulgated a new law which imposes tax on profits from freights of inbound routes. The objective of the new tax law titled &ldq ...
Monday, 13 October 14
CHINESE COAL IMPORT TARIFFS YET ANOTHER BLOW TO AUSTRALIAN COAL EXPORTS - TIM BUCKLEY
COALspot.com: China’s unexpected move to reintroduce thermal coal import tariffs of 6% will have a materially negative impact on the viabilit ...
Monday, 13 October 14
NEWCASTLE COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 54.92, SGX DATA SHOWS
COALspot.com: API 5 FOB Newcastle Coal swap for delivery Q4' 2014 decreased US$ 0.80 (-1.46%) month over month and US$ 0.52 (-0.95%) week over ...
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- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Planning Commission, India
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- The University of Queensland
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
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