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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, 08 October 14
IS THERE ANY BRIGHT SIDE ON THE DRY BULK SEGMENT? - YANNIS OLZIERSKY
In the movie “Life Of Brian”, a character on a nearby cross was singing the famous “Always look on the bright side of life” ...
Tuesday, 07 October 14
TAIPOWER TO IMPORT 525K MT OF LOW ASH AND EXTRA LOW SULFUR SUB-BITUMINOUS COAL
COALspot.com: Taiwan Power Company intends to procure 525,000 metric tons of low ash and extra low sulfur sub-bituminous coal for Taipower thermal ...
Tuesday, 07 October 14
SUB-BIT FOB INDONESIA COAL SWAP SHOWS A FLAT TO WEAK TREND THIS PAST WEEK
COALspot.com: Indonesian coal swaps November 2014 delivery flat week on week and gained US$ 0.10 (-0.20%) per mt day on day. The swap also lost US$ ...
Tuesday, 07 October 14
THE RIO TINTO CONFIRMS THAT NO DISCUSSIONS ARE TAKING PLACE WITH GLENCORE
COALspot.com: The board of Rio Tinto notes the recent press speculation regarding a possible combination of Rio Tinto and Glencore.The Rio Tinto bo ...
Tuesday, 07 October 14
API 8 CFR SOUTH CHINA COAL SWAP HEADED SOUTH
COALspot.com: API 8 CFR South China Coal swap for delivery in November 2014 decreased US$ 1.10 (-1.64%) month over month and US$ 0.25 (-0.38%) ...
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- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Planning Commission, India
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
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