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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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Thursday, 27 June 13
US COAL EXPORTS BEATS CHINESE COAL IMPORTS AS THE MOST INFLUENTIAL COAL TRADE - BIMCO
The influence of American coal exports on seaborne transportation has grown significantly over the past decade. In 2002, the US exported 20.1 millio ...
Thursday, 27 June 13
HANDY : USD 12000 FOR SPOT COAL INDO/CHINA AND AROUND USD 13000 INDO/ECI - FEARNLEYS
Handy
Atlantic rates hold well. Continent to Far East is worth more than USD 14k daily whilst USG to Far East pay 23/24k a day. On the route from B ...
Thursday, 27 June 13
DRY BULK CARRIERS DOMINATE NEWBUILDING ORDERS AS SHIP OWNERS ARE ENCOURAGED BY LATEST FREIGHT RATE RALLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding orders for dry bulk carriers were already high, compared to last year, prior to the latest rally of the Baltic Dry Index (BDI), which ha ...
Tuesday, 25 June 13
CAPESIZE MARKET TO REMAIN BULLISH SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been experiencing its long-awaited rally, with the Baltic Dry Index, the industry's benchmark rising to healthier levels fo ...
Tuesday, 25 June 13
NEWCASTLE PORT SHIPPED OUT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 3,101,378 tons of coal for the week ended 0700 hours 24 June 2013, Newcastle Port Corp. ...
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- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
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