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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, 18 August 13
INDO - INDIA FREIGHT EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market was up this week with the BDI gaining more than 10 pct due to strong Cape Sector.
The BDI was closed at 1,102 p ...
Friday, 16 August 13
US COAL PRODUCTION SLIGHTLY UP ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.10 million short tons (mmst) of ...
Thursday, 15 August 13
CAPESIZE : TRENDS SOMETIMES SHIFT WITH NO PRIOR WARNING - FEARNRESEARCH
Handy
The influence of the summer holidays across Europe was felt in the Atlantic basin this week. Very little activity and a growing list of avail ...
Wednesday, 14 August 13
ANOTHER WEEK IN THE RED FOR DRY BULK CARRIERS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable- )
Another week in the red for Dry Bulk carriers with the market losing further steam as fewer an ...
Tuesday, 13 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMP 30.61 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 30.61 per cent week on week to 2.95 million mt for ...
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- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- The University of Queensland
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- MS Steel International - UAE
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
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