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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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Saturday, 10 August 13
MOODY'S: OUTLOOK FOR US COAL INDUSTRY CHANGES TO STABLE FROM NEGATIVE
Moody's Investors Service has changed its outlook for the US coal industry to stable from negative, the rating agency says in a new report, "U ...
Saturday, 10 August 13
DEMOLITION ACTIVITY TO BE CRUCIAL AGAIN IN PROVIDING SUPPORT TO THE DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
We appear to have forgotten demolition activity this year, with the Baltic Dry Index gaining traction in the latter part of the second half and emer ...
Friday, 09 August 13
US PRODUCED 4.00 PERCENT LESS COAL ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.00 million short tons (mmst) of ...
Thursday, 08 August 13
HANDY : NO POSITIVE SENTIMENT FOR THE FAR EAST MARKET - FEARNRESEARCH
Handy
No positive sentiment for the Far East market. There are a number of ships coming open in SE Asia this week and owners rating mid/high USD 8k ...
Thursday, 08 August 13
MALAYSIA HOSTS THIRD ANNUAL ASIAN SUB-BITUMINOUS COAL USERS' GROUP CONFERENCE
Press Release : The third Annual Asian Sub-Bituminous Coal Users’ Group (ASBCUG) conference convenes Sept. 30-Oct. 3 at the Eastern & Orie ...
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- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Economic Council, Georgia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Videocon Industries ltd - India
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
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