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