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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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Monday, 12 August 13
GBCE SUCCESSFUL IN UPGRADING LOW RANK INDONESIAN COAL ON INDUSTRIAL SCALE
COALspot.com : GB Clean Energy Ltd. (GBCE) has annoused that, the company has successfully upgraded 2,426 tonnes of low rank 4,018 kcal NAR Ind ...
Monday, 12 August 13
INDIA - SAFE SHIPMENT OF IRON ORE FINES FROM INDIAN PORTS - WEST OF ENGLAND P&I CLUB
As Members may be aware, in 2009 two ships, the ‘Asian Forest’ and the ‘Black Rose’, capsized and sank following the liquefa ...
Sunday, 11 August 13
INDONESIAN COAL SWAPS : FLAT ON DAY
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery flat on day due to holidays in Indonesia, Malaysia & ...
Sunday, 11 August 13
SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA CONTINUED TO BE SOFT - VISTAAR
COALspot.com : The freight market was soft this week with all indices down , the reason could be long weekend holidays in Indonesia, Singapore and M ...
Saturday, 10 August 13
MOODY'S: OUTLOOK FOR US COAL INDUSTRY CHANGES TO STABLE FROM NEGATIVE
Moody's Investors Service has changed its outlook for the US coal industry to stable from negative, the rating agency says in a new report, "U ...
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- White Energy Company Limited
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
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