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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, 29 May 13
SHIP OWNERS KEEP ON SPENDING ON NEWBUILDINGS AS PRICES ARE DEEMED TOO LOW TO RESIST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It's been yet another week on increased newbuilding ordering activity with Hellenic ship owners appearing rathe active, on the back of attractive f ...
Tuesday, 28 May 13
NEWCASTLE PORT SHIPPED 9.76 PERCENT MORE COAL W/E 27 MAY 2013
COALspot.com - Newcastle port in Australia has loaded 2,420,366 tons of coal for week ended 0700 hours 27 May 2013, Newcastle Port Corp. said ...
Sunday, 26 May 13
AMPLE SUPPLY, LOW DEMAND KEEP COAL PRICES UNDER PRESSURE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have lost 0.07 percent and API 8 CFR South China Coal shipment los ...
Friday, 24 May 13
ENGAGEMENT WITH POTENTIAL STRATEGIC AND OFF TAKE PARTNERS ACCELERATING - REALM RESOURCES
COALspot.com - Following the recent completion of the Feasibility Study, the Realm Resources Ltd. (ASX: RRP) has focused on securing strategic ...
Friday, 24 May 13
US'S COAL PRODUCTION INCREASED WEEK ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 18.90 million short tons (mmst) of ...
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- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
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