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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, 09 September 20
MARKET INSIGHT - INTERMODAL
The uneventful summer lull which is coming to an end soon has left its stigma on the newbuilding market, which has already been devastated by the g ...
Saturday, 05 September 20
INDIA WON'T KICK ITS COAL HABIT SO EASILY - HINDU BUSINESS LINE
India has traditionally considered itself lucky to have been endowed with abundant coal reserves, which it has sought to use to meet its energy nee ...
Saturday, 05 September 20
FINANCING COMPLETE FOR 900MW FIFTH PHASE OF MASSIVE DUBAI SOLAR PARK: ARABIAN BUSINESS
Saudi-based ACWA Power on Thursday announced it has completed the signing of all financing agreements for the fifth phase of the Mohammed bin Rashi ...
Saturday, 05 September 20
POLISH COAL DEMAND EXPECTED TO FALL BY 7 MLN TONNES NEXT YEAR: MINISTER - REUTERS
Poland’s demand for coal is expected to fall by around 7 million tonnes next year, or more than 10% of annual hard coal production, after a d ...
Saturday, 05 September 20
PAKISTAN'S NEW 27-YEAR POWER PLAN RISKS LOCKING IN LONG-TERM OVERCAPACITY, LEAVING IMPORTED COAL AND LNG PLANTS STRANDED - IEEFA
Wind and solar, the country’s cheapest source of new generation, also overlooked
Pakistan risks locking itself into building m ...
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- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Planning Commission, India
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- The University of Queensland
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
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