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