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Wednesday, 21 August 13
DRY BULK SHIPPING - POSITIVE WINDOW FOR CAPESIZE OWNERS - PETER SAND
 By: Peter Sand, Chief Shipping Analyst, BIMCO
Demand:
“Expect the unexpected from the dry bulk market” was what we wrote last time around and what we got – but did not anticipate. As the Summer heat arrived, Capesize owners found themselves basking in the sun. Average earnings for Capesize vessels went from USD 6,000 per day to USD 12,000 per day in less than two weeks. The momentum lifted rates as high as USD 15,218 per day on 1 July. This was a sizeable and very welcome surprise as the combination, once again, of vessels being at the “right place at the right time” proved to be profitable. As Brazilian iron ore exports in particular jumped after some weaker months, congestion at load ports rose and charterers were left searching for prompt and available tonnage. At the same time, Australian iron ore ports were hit by heavy rainfall which also affected shipping. It is a little miracle that tight situations can still appear and push up freight rates, in spite of tonnage being abundant in the market. Since the 1 July peak, freight rates have slid slowly, as the imbalanced market is smoothed by ballasting tonnage returning to the Atlantic from the Far East. Some of the weakness in most of H1 is due to the fact that Brazil has been losing some of its share of the iron ore market to Australia.
Besides that, the market is affected by falling commodity prices (iron ore, steel and coal). This could, in theory, positively affect shipping demand if consumers and traders take advantage of it and stock up, but it may as well mirror a fundamental slowdown in demand.
No slowdown is seen in steel production fortunately, at Chinese steel production went up by 9.2% in the first half as compared to same period last year. Iron ore imports “only” went up by 4.8% in the same period of time. Both indicators are positive for shipping demand. Traditionally, Chinese iron ore demand is stronger in the second half of the year; this could build a case for stronger rates in the larger segments in Q3 and Q4 if this seasonality is repeated.
The larger production of steel and moderate consumption of same has put steel prices under pressure. Falling steel prices are normally quite worrying for the dry bulk sector. In the wake of several months with record high steel production, prices weakened continuously, getting quite close to the threateningly low levels of August/September 2012. But has the scare just evaporated with the latest pick up in prices toward the end of July? That is still too early to call despite the optimism in most recent “official” China manufacturing PMI report.
Supply:
During the past two months, 10 million DWT of new tonnage has joined the dry bulk fleet, which now totals at 704 million DWT. This is up by 3.6% since 1 January.
Looking at future delivery prospect, 70% of all new orders placed during the past two months have been for 2015 delivery. In addition to some postponements, this has pushed the projected orders for 2015 delivery up from 20 million to 25 million DWT.
For 2013, BIMCO projects new tonnage of 70 million to hit the water, a four-year low, and a gradual return to a lower supply pressure on the market.
While new orders have been fairly equally distributed for the past two months as a whole, June saw a flurry of Supramax orders whereas July was pretty biased towards Capesize vessels. As a lot of Panamax ships are currently being delivered into an oversupplied market, owners showed only little appetite for placing new orders for Panamax ships.
In total, the dry bulk order book has grown by 3.2 million DWT during the recent two months. It now stands at 126 million DWT. It’s the first time in more than two and a half years that the order book has increased, on its way down from 300 million DWT highs at the end of 2010.
As 29 million DWT of new vessels have been ordered so far in 2013, the total has already surpassed that of the full year 2012. This development seems to have stopped the slide of new building prices, which are now seen to be on a slow rise, with the exception of Panamax new building prices which are still flat, as demand does not support higher prices in this segment yet.
Outlook:
As the global and Chinese GDP are now seen lower than earlier in the year, we also have to settle for something that might be the sixth consecutive year of supply outpacing demand. But the race is still on, as supply is set for 5.7% and demand for 5-6%.
China’s import of agricultural products could provide some upside, as wheat and soybeans could end up falling short of demand due to adverse weather conditions. If imports of wheat are supplied predominantly by US producers, which is likely, this may bring some growth in demand due to long sailing distances. The same effect can be expected by increased Brazilian exports of soybeans in the second half of the year following a congestion-affected export level in the January-May period.
In recent months, Asian thermal coal prices have nose-dived, as plenty of coal is offered in the market. Utilities are no longer worried about running stocks low, as supply is excessive. During the second quarter, Russian, Columbian and American coal was also offered into the market, putting further pressure on traditional Indonesian and Australian coal markets. FOB thermal coal prices for “Newcastle 5500” or “Richards Bay 5500” were just above USD 66 per Mt coming down from USD 75 per Mt and USD 72 per Mt respectively. As we know, demand is healthy, the lower prices could prove a catalyst for higher freight rates as we move further into Q3. Further weakening of the Indian Rupee or the Japanese Yen could dampen the positive effect somewhat.
To sum up, our forecast for the coming 2 months:
BIMCO holds the view that Capesize TC average rates are expected around USD 8,000-13,000 per day.
Panamax is expected to stay in the USD 6,000-9,000 per day interval.
For the Supramax segment, BIMCO forecasts freight rates in the USD 8,000-11,000 per day interval,
whereas Handysize rates are forecast to show limited volatility in the interval of USD 6,500-9,000 per day.
Source: BIMCO Peter Sand Chief Shipping Analyst / Hellenic Shipping
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Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Australian Coal Association
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- MS Steel International - UAE
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- The University of Queensland
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Central Java Power - Indonesia
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