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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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Wednesday, 22 November 23
INDIA: GOVERNMENT PLANS 1.4 BILLION TONNE COAL OUTPUT BY 2027 - LIVEMINT
The Union coal ministry on Monday announced plans to increase India’s coal production to 1.404 billion tonne by 2027, with an eye to further ...
Wednesday, 22 November 23
OBLIGATION. INDONESIA AIMS TO START COLLECTING LEVIES FROM COAL MINERS IN JANUARY - REUTERS
Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower ...
Tuesday, 21 November 23
INDIAN COAL POWER PLANTS’ CAPACITY UTILISATION WILL IMPROVE TO 65% THIS FISCAL: - CRISIL
Coal-based thermal power units’ plant load factor (PLF) or capacity utilisation will improve to 65 percent in the current fiscal year despite ...
Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime ...
Tuesday, 14 November 23
COAL INDIA BEATS Q2 PROFIT VIEW ON HIGH POWER DEMAND AMID WEAK MONSOON - REUTERS
Coal India on Friday reported better-than-expected second-quarter profit, helped by high power demand and boosted production amid a weak monsoon.
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- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Economic Council, Georgia
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- VISA Power Limited - India
- The Treasury - Australian Government
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
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