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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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Friday, 19 July 13
U.S.COAL PRODUCTION TOTALED APPROXIMATELY 19.60 MMST WEEK ENDED JULY 13
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.60 million short tons (mmst) of ...
Friday, 19 July 13
TNPL IS LOOKING FOR 300 K MT OF 6000 GAD COAL FOR FIVE MONTH
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 5 shipments about 60,0 ...
Thursday, 18 July 13
3RD ANNUAL FLOATING TERMINALS, INDONESIA
Commercial applications for offshore transshipment facilities
Floating Terminal solutions are increasingly being deployed by miners, independent ...
Thursday, 18 July 13
THE CAPE MARKET APPEARS TO BE HOLDING FIRM - FEARNLEYS AS
Handy
In the Pacific, market maintained similar levels during the week. There is several Indo coal orders in the market, ships passing Singapore fi ...
Thursday, 18 July 13
DRY BULK MARKETS RETAINS RECENT GAINS, MOVES SIDEWAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on moving sideways this week, as evidenced by the latest trends of the industry's benchmark, the Baltic Dry Index (BDI ...
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- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Australian Coal Association
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
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