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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, 04 August 13
COAL SWAP MARKET HAS LOST DIRECTION; STRUGGLING TO CATCH UP
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average October 2013 delivery slightly down on day, week and month on Friday, 2 A ...
Sunday, 04 August 13
INDONESIA TO INDIA SUPRAMAX FREIGHT SOFT DUE TO HOLIDAYS IN INDONESIA - VISTAAR
COALspot.com : The freight market was fairly steady this week with the BDI recovering towards north since second half of the week with the support o ...
Friday, 02 August 13
DRY BULK MARKET STABILIZES ON RENEWED MARKET ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its positive footing this week, although it's still a far cry to deem the market situation as a growing one, especiall ...
Friday, 02 August 13
ASIA ACCOUNTS FOR 27.95 PERCENT OF US COAL EXPORTS IN Q1, 2013
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
Thursday, 01 August 13
CAPESIZE: THE FLOW OF CARGOES REMAINS RELATIVELY STABLE, AND THE PACIFIC IS LOOKING PROMISING - FEARNLEYS AS
Handy
The Pacific market is still facing low activity, so no wonder that the tonnage list is getting longer. It´s still Ramadan and only a fe ...
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- Economic Council, Georgia
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Deloitte Consulting - India
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Ministry of Transport, Egypt
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- White Energy Company Limited
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
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