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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
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