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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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Sunday, 01 September 13
INDONESIA TO INDIA SPOT FREIGHT STAYS FIRM THIS WEEK - VISTAAR
COALspot.com: The freight market continued to be firm with even though the BDI and Cape index dropped by about 3 pct week on week.
The BDI was do ...
Friday, 30 August 13
US COAL PRODUCTION FELL 0.48 PERCENT WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.70 million short tons (mmst) of ...
Thursday, 29 August 13
HANDY: THE PACIFIC MARKET STARTED HEALTHY THIS WEEK - FEARNRESEARCH
Handy
The Pacific market started healthy this week. We have seen many bauxite, iron ore and few coal fixtures. Ships passing Singapore were able to ...
Thursday, 29 August 13
NO RATING IMPACT ON INDONESIAN ENERGY COMPANIES FROM RUPIAH DEPRECIATION - FITCH RATINGS
Fitch Ratings says the credit profiles of rated Indonesian energy and utilities companies, including thermal coal producers, will largely remain una ...
Wednesday, 28 August 13
THE BDI HAS MOVED TO LEVELS CONSIDERABLY STRONGER THAN THE BEGINNING OF THE YEAR - INTERMODAL
By George Bassakos
SnP Broker - Intermodal
We have already reached the end of August and whilst students are preparing themselves for another sc ...
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- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- The University of Queensland
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Planning Commission, India
- Trasteel International SA, Italy
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
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