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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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Monday, 01 July 13
12TH CLEAN COAL FORUM INDONESIA 2013
Press Release: Produced by CDMC Events, The 12th Clean Coal Forum Indonesia 2013 will be held on Dec 5-6,2013 in Jakarta, Indonesia. It will generat ...
Monday, 01 July 13
INDIA AND CHINA STILL DOMINATING THE INDONESIAN THERMAL COAL EXPORT MARKET
COALspot.com: Indonesia, the world's largest multi types coal exporter shipped 35.83* million tons of coal in May 2013, 1.40 per cent l ...
Sunday, 30 June 13
YEAR 2014 INDO SUB-BIT COAL SWAPS EXPECTED TO STAY BELOW 2013 LEVEL
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average August 2013 delivery have gained 0.08 percent on a day lost on week ...
Sunday, 30 June 13
CAPESIZE RATES SEEN INCREASING ON HIGH DEMAND - VISTAAR
COALspot.com - The BDI continued to rise and saw a big gain on Friday. BDI increased 14 per cent week ended 28 June 2013, closed at 1171 points driv ...
Friday, 28 June 13
U.S. PRODUCED 1.52 PERCENT LESS COAL WEEK ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.40 million short tons (mmst) of ...
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- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- The University of Queensland
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Economic Council, Georgia
- Mjunction Services Limited - India
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
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