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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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Tuesday, 30 July 13
AUSTRALIA'S NEWCASTLE SHIPPED 12.58 PERCENT LESS COAL W-O-W
COALspot.com: Newcastle port in Australia has loaded 2,945,848 tons of coal for the week ended 0700 hours 29 July 2013, Newcastle Port Corp. s ...
Monday, 29 July 13
INDONESIA'S ENERGY NEEDS COULD SPELL GOOD NEWS FOR TANKER OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite abundant energy resources, Indonesia has still failed meet its own demand, which led to a rising import of crude. According to the latest we ...
Sunday, 28 July 13
SUB-BIT INDONESIA COAL SWAP UP SLIGHTLY FOR SEPTEMBER CARGOES
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average September 2013 delivery slightly up on day and week but fell on month on ...
Saturday, 27 July 13
CEPL INDIA TO BAG 0.3 MILLION TONS OF COAL SUPPLY ORDER FROM TNPL
COALspot.com - An India based coal trader Coastal Energy Private Limited has offered the lowest price of US$ 73.00 per metric ton for calorific valu ...
Saturday, 27 July 13
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES ARE EXPECTED TO REMAIN STEADY - CAPT.REDDY
COALspot.com : The freight market seemed to soften this week with BDI , Cape and Panamax indices dropped average 5 percent on week.
The BDI was d ...
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- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Planning Commission, India
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- Bhatia International Limited - India
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- The University of Queensland
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
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