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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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Friday, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
Several factors have aligned over the past two years to create a robust and profitable market for tanker owners, which is expected to drive newbuil ...
Friday, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
In the final days of February, the dry bulk freight market appeared to maintain a relatively stable momentum, particularly evident in the large ves ...
Friday, 23 February 24
RUSSIAN COAL SHIPMENTS FALL 14% AS SANCTIONS BITE - BIMCO
During the first seven weeks of 2024, Russian coal shipments have fallen 14% y/y. Volumes have gradually declined since October 2023 when logistica ...
Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can e ...
Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
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- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
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