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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, 09 July 13
CAPESIZE: SHOT UP; PANAMAXES: NOT SO LUCK; SUPRAS: SLIGHTLY BETTER; HANDIES: SOFT - INTERMODAL
COALspot.com : June 2013 Recap
A renewed Capesize market this month (June 2013) was the cause for much of the overall noteworthy performanc ...
Tuesday, 09 July 13
THE 11TH DEEP COAL PROCESSING FORUM 2013
Press Release : The 11th Deep Coal Processing Forum 2013 will be held in November Beijing China.
CDMC Events is pleased to announce that 11 ...
Monday, 08 July 13
ECO-FRIENDLY COAL FOR CHINA - VALUE FOR THE ENVIRONMENT AND VALUE FOR THE POWER GENERATOR - BY: LINDSAY JUNIPER
COALspot.com : January 2013 saw an episode of extreme particulate pollution in Beijing 35 times worse than the safe level recommended by the World H ...
Sunday, 07 July 13
FREIGHT MARKET IS EXPECTED TO BE SOFT TO STABLE NEXT WEEK- VISTAAR
COALspot.com - The freight market softened for the week ended 5 July 2013, and experienced a decline in all sectors, including BDI. Bulk dry Index d ...
Sunday, 07 July 13
COAL PRICES REMAIN UNDER PRESSURE
COALspot.com – Coal swaps for the year 2014 indicate that, the pressure on coal prices will continue at least until next year. Ave ...
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- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- White Energy Company Limited
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Central Java Power - Indonesia
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
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