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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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Wednesday, 19 June 13
NEWCASTLE SHIPPED 16.05 PERCENT LESS COAL W/E 17 JUNE 2013
COALspot.com - Newcastle port in Australia has loaded 2,606,071 tons of coal for the week ended 0700 hours 17 June 2013, Newcastle Port Corp. ...
Sunday, 16 June 13
WEAK DEMAND KEEPS COAL PRICES LOW
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have lost 2.94 percent week on week but gained 0.06 percent ...
Saturday, 15 June 13
S7 AND S8 ROUTES ARE EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - This week freight movement was fairly firm with news of China is rebuilding iron ore stockpiles, and ease import rules. Cape and Pana ...
Saturday, 15 June 13
SHIPPING CONFIDENCE REACHES HIGHEST LEVEL FOR TWO AND A HALF YEARS - MOORE STEPHENS
Overall confidence levels in the shipping industry rose to their highest level for two and a half years in the three months ended May 2013, accordin ...
Friday, 14 June 13
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 18.20 MILLION SHORT TONS W/E 8 JUNE 2013
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 18.20 million short tons (mmst) of ...
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- The Treasury - Australian Government
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
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