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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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Saturday, 27 September 14
MORE COAL MINERS AGREE TO AMEND CONTRACTS - THE JAKARTA POST
The Energy and Mineral Resources Ministry is in a rush to beat a deadline for the conclusion of numerous memorandums of understanding (MoUs) with t ...
Friday, 26 September 14
INDIA SUPREME COURT RULING TO HIT STEEL, UTILITY EARNINGS, SAYS FITCH
COALspot.com: The 24 September Supreme Court of India (SCI) decision to cancel almost every coal block allocation since 1993 will have a negative f ...
Friday, 26 September 14
U.S WEEKLY COAL PRODUCTION FELL 1.8% WEEK OVER WEEK, SAYS EIA
COALspot.com – United States the world's one of largest coal producers, produced approximately 18.80 million short tons (mmst) of c ...
Friday, 26 September 14
ORACLE SIGNS EPC FRAMEWORK AGREEMENT WITH SEPCO FOR COAL MINE AND POWER PLANT IN PAKISTAN
COALspot.com: Oracle Coalfields PLC, the UK developer of a lignite coal mine and power plant in the south-eastern Sindh Province, Pakistan, has ann ...
Friday, 26 September 14
NEWCASTLMAXES ARE THE MOST SOUGHT AFTER VESSELS BY SHIP OWNERS TODAY SAYS VESSELS VALUE
KNOWLEDGE TO ELEVATE
Determining a ship’s fair value can be a very tricky business, especially when you’re the one paying. As such ...
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- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- The University of Queensland
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- MS Steel International - UAE
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
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