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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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Friday, 10 October 14
U.S. PRODUCED 83.2 MMST OF COAL IN SEPTEMBER, SAYS EIA
COALspot.com – United States the world's one of largest coal producers, produced approximately 18.6 million short tons (mmst) of coal in ...
Thursday, 09 October 14
CAPESIZE MARKET HAS CONTINUED TO SHOW WEAKNESS - FEARNLEYS
Handy
We mentioned last week that after several weeks of rate increase for the Supras, the bigger Panamaxes started to snap up better paying Supr ...
Thursday, 09 October 14
SHIPPING REMAINS CHALLENGED AS GLOBAL GROWTH DISAPPOINTS - BIMCO
The global shipping industry finds no grace from much stronger economic activity going forward, as the global recovery remains fragile and uneven. ...
Wednesday, 08 October 14
CAPES RATE FOR THE W. AUSTRALIA TO CHINA VOYAGE MOVED TO BELOW $8/MT - INTERMODAL
The Dry Bulk market remained under pressure last week, with rates for Capes remaining on the red while those for Panamaxes managed to outperform th ...
Wednesday, 08 October 14
OIL COULD FALL TO USD80 BEFORE SHALE SUPPLY RESPONSE - FITCH
COALspot.com: Brent oil could fall as low as USD80 a barrel before triggering a self-correcting supply response with shale-oil drillers cutting inv ...
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- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
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