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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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Thursday, 05 September 13
DRY BULK MARKET ON A HIGH ROLL, MAINLY THANKS TO CAPESIZE APPETITE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize owners have been rejoycing on the back of renewed optimism for the further rise in the dry bulk market's freight rates, especially when on ...
Wednesday, 04 September 13
RBCT SHIPPED 16.18 PERCENT MORE COAL IN JULY
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest coal export terminal South African as well as in the world has shipped 6,162, ...
Wednesday, 04 September 13
SUPRAS AND HANDIES : INDONESIAN COAL CARGOES ARE SUPPORTING HEALTHY ACTIVITY LEVELS - INTERMODAL
The Dry Bulk market has pooled back a bit this week after firming for two weeks in a row. The BDI is s holding above 1,100 points and despite the sm ...
Tuesday, 03 September 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 22.93 PER CENT MORE COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 22.93 per cent week on week to 3.39 million mt for ...
Sunday, 01 September 13
COAL SWAP SHOWS MIXED TREND
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery 1.25 percent up month on month. The swap was moved posit ...
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- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
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