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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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Thursday, 18 September 14
INDONESIA'S JULY COAL EXPORT VOLUME DROPPED 5.13% M-O-M
COALspot.com: Indonesia, one of the world's largest coal producer and the global leading multi grade coal exporter shipped around $1.65* ...
Thursday, 18 September 14
PANAMAX : US GULF/CHINA FRONTHAUL ARE NOW PAYING TYPICALLY 14.5K + 450K BB - FEARNRESEARCH
Handy
We still see a firming tendency in the Atlantic and it is still ECSA and USG leading on. USG/Cont now up in about USD 17/18k for a Smax whi ...
Thursday, 18 September 14
ELECTRONIC BILLS OF LADING: A GUIDE TO PAPERLESS TRADING WHICH HAS TAKEN THE SHIPPING INDUSTRY BY STORM
Bimco has recently developed and published a charter party clause that specifically addresses the use of electronic bills of lading. Increasing use ...
Wednesday, 17 September 14
PANAMAX: LIMITED INTEREST IN BOTH BASINS; RISING TONNAGE - INTERMODAL
With the week starting off at a fast pace and with the positive momentum from the previous Friday seemingly sticking around for a bit longer, most ...
Wednesday, 17 September 14
SHIPPING MARKET INSIGHT - GEORGE LAZARIDIS
Since the onslaught of 2013 the rising tide of asset prices had been primarily driven by the increasing freight market conditions and the improving ...
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- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
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