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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, 22 August 13
PANAMAX : PERIOD MARKET IS STILL BEING LED BY STRONGER SENTIMENT IN THE FFA'S - FEARNRESEARCH
Handy
This week started slowly as expected. Indo biz now rate APS around 7k +60k to china and around 8k+80k to India. However, there are some ships ...
Wednesday, 21 August 13
RATES FOR CAPES MOVED DECISIVELY NORTH THIS WEEK - INTERMODAL
COALspot.com - Right when the BDI seemed ready for another dive below the 1000 points level, the Dry Bulk market made significant comeback this week ...
Tuesday, 20 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS FALL 19.15 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 19.15 per cent week on week to 2.39 million mt f ...
Tuesday, 20 August 13
CAPESIZE RATES MORE SENSITIVE TO DEMAND - COMMODORE RESEARCH & CONSULTANCY
COALspot.com : Approximately 71.50 million tons of iron ore is now stockpiled at Chinese ports, 900,000 tons (-1%) less than a week ago, Commodore R ...
Sunday, 18 August 13
SUB-BIT FOB INDONESIA COAL SWAP : ON POSITIVE DIRECTION ON DAY, WEEK AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 1.83 up month on month. The swap was moved positive ...
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- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Planning Commission, India
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
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