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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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- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Australian Coal Association
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- The University of Queensland
- Planning Commission, India
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
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