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