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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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Wednesday, 31 July 13
COAL GASIFICATION
IBC’s Coal Gasification conference explores the opportunities for coal gasification investment and development in Asia.
With depleting dome ...
Wednesday, 31 July 13
SUPRAMAX : THE PACIFIC BASIN WAS MOVING ON A POSITIVE PATH - EVA TZIMA
COALspot.com: Cape - Despite holding their ground fairly well early on in the week, Capes in the Atlantic basin gave in to the mounting pressure fro ...
Tuesday, 30 July 13
HARD COAL ON THE WAY TO BECOMING THE WORLD'S MOST IMPORTANT ENERGY SOURCE - VDKI
Press Release : Hard coal continued to be the world’s fastest-growing fossil primary energy source in 2012. It covered about 28% of the world ...
Tuesday, 30 July 13
WIJAYA TRI UTAMA PURCHASES MICROCOAL TECHNOLOGIES' CLEAN COAL UPGRADING FACILITY
- First MCI commercial scale application of proprietary microwave technology to upgrade coal thermal output and reduce pollutants
- MicroCoal to re ...
Tuesday, 30 July 13
KOMIPO INVITES BIDS FOR 520,000 MT OF 5,700 KCAL/KG COAL ON NAR BASIS FOR H1, 2014
COALspot.com : Korea Midland Power Co., Ltd. has invited bids for 520,000 Metric Tons (MT) of coal with calorific value 5,700 kcal/kg on NAR basis f ...
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- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Australian Coal Association
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Planning Commission, India
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- The University of Queensland
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
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