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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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Monday, 13 October 14
INDONESIAN COAL SWAPS FOR DELIVERY Q4' 2014 GAINED WEEK ON WEEK AND DAY ON DAY
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 gained week on week and day on day.
The swap lost US$ 0.13 (-0.25%) month on mon ...
Monday, 13 October 14
Q1' 2015 CFR SOUTH CHINA COAL SWAP CLOSED US$ 0.31 PMT HIGHER THAN Q4' 2014 CLOSING
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery decreased US$ 0.66 (-1.00%) month over month and US$ 0.40 (-0.61%) ...
Sunday, 12 October 14
INDONESIA TO INDIA FREIGHT RATES ARE EXPECTED TO BE WEAK - VISTAAR
COALspot.com: This week all the segments softened. The BDI down 7.13 pct week on week and closed below 1000 points at 963 points.
The Cape ind ...
Saturday, 11 October 14
COAL PRODUCTION RISES ONLY SLIGHTLY AS GOVT LIMITS MINING OPERATIONS - THE JAKARTA POST
Indonesian coal production rose by only 4 percent in the first nine months of this year, a relatively low increase compared to previous years, as t ...
Friday, 10 October 14
INDONESIA TO DEVELOP DOWNSTREAM COAL INDUSTRY - JP
The government is planning to launch a program to develop the downstream coal industry to increase the commodity’s added value, an official h ...
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- White Energy Company Limited
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Planning Commission, India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- PTC India Limited - India
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