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Thursday, 13 June 13
BIMCO EXPECTS SUBDUED CAPESIZE EARNINGS FOR THE COMING WEEKS - HELLENIC SHIPPING NEWS
 Bulk is not only about China even though it is a key driver. In this section, we have taken a closer look at the European seaborne coal markets, which is going through some interesting times right now. European coal demand has been in a slump ever since early 2009, where seaborne demand fell by 14 million tons from the first to the second quarter. Import volumes during the last three quarters of 2011 indicated that seaborne coal demand was recovering, but the development stalled somewhat in 2012. Looking on a country basis, the nation with the biggest decline was Italy, with annual seaborne imports being roughly 8 million tons lower today than before the financial crisis. France has also decreased its imports by around 4-5 million tons annually. The United Kingdom and Spain have weakened as well, but these countries seem to be on a rebound, with volumes being slightly below pre-financial crisis levels. The Netherlands and Germany have had relatively stable import numbers since 2005.
The bulk of seaborne coal going to Europe comes from North America, Colombia and Russia. The United States and Colombia have doubled their exports to Europe, while Russia has maintained its share of the European demand. Russian coal is shipped from both Russian and Latvian ports; Colombian coal is primarily shipped from the Caribbean, while US coal is primarily shipped from the Atlantic Coast and the Mexican Gulf. The drop in European seaborne demand for coal did not affect these countries, but rather South Africa. From being the single largest coal exporter to Europe with 52.0 million tons in 2005, the country has become a footnote, with 13.6 million tons in 2011. This represents bad business for the shipping industry, since the sailing distance from Richards Bay to Rotterdam is 98% longer than from Hampton Roads and 61% longer than from Puerto Bolivar.
Although European coal imports didn’t tell a particular positive story for shipping, US exports most certainly did. We expect to publish a story on this within the next couple of weeks.
On a more general note regarding the bulk market, China is expected to increase its imports of wheat, as sub-standard storage facilities have damaged a part of the huge Chinese stockpiles. Traders said that China is seeking to increase imports when global prices are in a slump. Current forward prices indicate that this may happen during the third quarter of 2013. According to Chinese customs statistics, the main exporters of wheat to China are Australia, Canada and United States, the latter two providing significant tonne miles.
Meanwhile, Argentina is exporting record high volumes of grains; CRSL reported that Argentina exported 4.86 million tons of grains in March – the highest number ever for a single month. This gave a spike in Panamax rates with the BPI staying just below the psychological barrier of USD 10,000 per day in March and April, but earnings are now slightly lower at around USD 7,000 per day. In our last report, we predicted that Panamax rates would stay in the USD 5,000-10,000 per day territory; going forward seasonal events like Argentinian exports are likely to provide for the upside ticks.
SUPPLY
New dry bulk deliveries walk the anticipated line and have now reached 29 million DWT. Meanwhile, 11 million DWT have been sold for recycling, which brings the year-to-date fleet growth up to 2.8%. The inflow is seen primarily in the Panamax segment, where 136 (in 2012: 162) new vessels are keeping Panamax fleet growth high. Simultaneously, the Capesize segment only saw 48 (in 2012: 115) new vessels coming on stream, eventually easing some of the pain from the current overcapacity.
Average age and size of the demolished tonnage is 28 years and 60,000 DWT. In line with the development seen in the last couple of years, the average age is still trending down – whereas the average size is essentially unchanged. BIMCO forecasts a slightly lower level of tonnage being demolished in 2013 as compared to last year; however, it is still going to be the second-largest year on record. The solid level of demolition prices will inspire owners to consider recycling, rather than trading their old tonnage in a very volatile market without certainty of sustainable freight rates and against more energy efficient tonnage.
As regards the orderbook, it’s also moving in the right direction in spite of the recent flurry of new orders for more fuel-efficient tonnage. During the past 10 weeks the number of newbuilding orders in the book has come down from 1,599 to 1,548. Finally, on the ordering side, strong interest in Capesizes remains evident, with 62 new orders in 2013. A total of 18 million DWT has been ordered in the year so far, with March and April seeing total new orders placed in excess of 4.5 million DWT each month.
OUTLOOK
The Summer lull is creeping up on dry bulk shipping demand following the successful South American grain season. Fortunately, solid demand is keeping spirits up in the dry bulk industry, while the severe extent of overcapacity is pushing the date for a full-blown recovery of earnings into a somewhat distant future. For now the market is getting more and more spot focused, as no owners want to commit tonnage for longer terms at offered levels. Don’t look at the paper market for any support, because you won’t find it. FFA indications (10/6) for Capesize tonnage go to the tune of USD per day: Q3-13, Q4-13, Cal 14 and Cal 15: 7,550, 12,000, 11,450 and 13,700 and for Supramax the indications go as follows in USD per day for the same dates: 7,900, 8,400, 8,600 and 8,900. USD per day in the spot market (10/6): Capesize for 5,571 and Supramax for 9,307.
Expect the unexpected from the dry bulk market seems to be the message passed on in recent years – and today is no different, as Handysize tonnage is earning USD 10,900 per day on an Atlantic round voyage whereas Capesizes are struggling to get a 1 year T/C fixed at USD 10,500 per day if at all. With respect to freight rates for Panamax and Supramax tonnage, they have lost ground since the beginning of March.
To sum up, our forecast for the coming 6 weeks: BIMCO holds the view that Capesize TC average rates are expected to remain subdued around USD 4,500-7,500 per day. Panamax is expected to stay in the USD 4,500-8,000 per day interval. For the Supramax segment, BIMCO forecasts freight rates in the USD 7,000-10,000 per day interval, whereas Handysize rates are forecast to stay at the interval of USD 6,000-8,500 per day.
Source: BIMCO / Hellenic Shipping News
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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- The University of Queensland
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Australian Coal Association
- Deloitte Consulting - India
- Planning Commission, India
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
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