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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, 07 June 13
MEDITERRANEAN COAL MARKETS
Press Release: 3rd International Conference Mediterranean Coal Markets will be held on 16-17th of September 2013, Istanbul, Turkey, Ceylan Intercont ...
Friday, 07 June 13
US'S COAL PRODUCTION INCREASED BY 0.54 PER CENT THE WEEK ENDED JUNE 1
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 18.60 million short tons (mmst) of ...
Thursday, 06 June 13
WE ARE SEEING SOME FRESH INDO COAL TO CHINA AND INDIA - FEARNRESEARCH
Handy
In the Atlantic, the Gulf remains firm for the next week with a few orders in the market. The Supramaxes are seeing around low 20k for fronth ...
Wednesday, 05 June 13
DON'T AVOID PAYING COAL ROYALTY TO THE GOVERNMENT - INDONESIAN ENERGY MINISTER
COALspot.com – “Every country has the right to make policies to protect their national interests”, Energy and Mineral Resources Mi ...
Tuesday, 04 June 13
NEWCASTLE PORT SHIPPED 2.56 MILLION TONS OF COAL IN A WEEK
COALspot.com - Newcastle port in Australia has loaded 2,563,596 tons of coal for week ended 0700 hours 3 June 2013, Newcastle Port Corp. said ...
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- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Minerals Council of Australia
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Savvy Resources Ltd - HongKong
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