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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, 12 July 13
U.S. PRODUCED 18.40 MMST COAL WEEK ENDED 6 JULY 2013
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 18.40 million short tons (mmst) of ...
Thursday, 11 July 13
PANAMAX: PACIFIC ROUND PAY AROUND $6,500/D; ATLANTIC ROUND VOYAGE PAY AROUND US$ 10,000/D - FEARNLEYS AS
Handy
The Feast market is quiet, July date cargoes remain unfixed as there is a gap between what owners aiming and charterers willing to pay. There ...
Wednesday, 10 July 13
DRY BULK MARKET IS STILL STRUGGLING TO SURVIVE - INTERMODAL
COALspot.com : With the first half of the year now behind us and, as expected, most shipping segments in the dry bulk market are struggling to survi ...
Tuesday, 09 July 13
COAL PRICE REMAINS SLUGGISH - TRIMEGAH
COALspot.com - Newcastle coal price has reached US$ 76.30/ton (-15.9% YTD), bringing YTD’13 average to stand at US$ 87.90/ton, 6.80% lower tha ...
Tuesday, 09 July 13
NEWCASTLE COAL EXPORTS JUMP 27.53% ON WEEK TO 2.97 MILLION MT
COALspot.com - Newcastle Coal exports up 27.53% to 2.97 million tons W-o-W.
Newcastle port in Australia has loaded 2,974,715 tons of coal for the ...
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- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Australian Coal Association
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- VISA Power Limited - India
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
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