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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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- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- The University of Queensland
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
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