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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, 22 September 14
CFR SOUTH CHINA COAL SWAPS LOST ON DAY, WEEK AND MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in October 2014 decreased US$ 3.10 (-4.50%) month over month and $ 0.95 PT MT week over ...
Monday, 22 September 14
INDONESIAN COAL SWAPS LOST WEEK ON WEEK AND MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for average October 2014 increased US$ 0.35 (+0.69%) day on day and lost US$ 0.30 (-0.58%) per mt week on week. ...
Sunday, 21 September 14
CAPE INDEX LOST 17% W-O-W ; BALTIC DRY PLUNGES 106 POINTS
COALspot.com: This week the freight market softened a bit compared to last week.
BDI fell 8.97% week on week and closed BDI at 1075 points on ...
Friday, 19 September 14
U.S. WEEKLY COAL PRODUCTION RELATIVELY FLAT AT +0.1% - EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 19.20 million short tons (mmst) of coal in ...
Friday, 19 September 14
PRICES FOR DRY BULK CARRIERS HAVEN'T CORRECTED ENOUGH, DESPITE LOWER THAN EXPECTED FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A lot has been said and written about the looming dry bulk market recovery over the past few months. However, even if this hasn’t been materi ...
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- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Planning Commission, India
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
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- Trasteel International SA, Italy
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- New Zealand Coal & Carbon
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- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
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- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
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- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
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- Petrochimia International Co. Ltd.- Taiwan
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- The University of Queensland
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- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- CNBM International Corporation - China
- Central Electricity Authority - India
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Australian Coal Association
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
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- CIMB Investment Bank - Malaysia
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- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
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- Medco Energi Mining Internasional
- Bhatia International Limited - India
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- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
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- Standard Chartered Bank - UAE
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- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
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- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
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