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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, 24 May 13
OPG POWER VENTURES OF INDIA LOOKING FOR 210,000 MT OF 4,200 GAR INDONESIAN THERMAL COAL
COALspot.com - OPG Power Ventures Plc (OPG) is an AIM listed (London Stock Exchange) and fast growing developer and operator of power plants in Indi ...
Thursday, 23 May 13
HANDY : THE ATLANTIC MARKET REMAINS UNCHANGED - FEARNRESEARCH
Handy
The Atlantic market remains unchanged. USG-Feast rates were around USD 19k. Little change from last week in the Pacific, fewer stems and tonn ...
Thursday, 23 May 13
COLOMBIA SHIPPED 11.74 MILLION TONS OF THERMAL COAL IN Q1
COALspot.om - Colombia produced about 18,388,972.94 mt of coal for the first quarter of 2013.
Q1' 2013 coal production was around 21.42 p ...
Wednesday, 22 May 13
COKAL SIGNS JV WITH MDM, FOR BARITO RIVER BARGING
COALspot.com - Cokal Limited (ASX: CKA) has announced that it has entered into a 50:50 Joint Venture (JV) with Meratus Advance Maritime (MDM) one of ...
Tuesday, 21 May 13
NEWCASTLE PORT COAL SHIPMENTS SEEN FALLING WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,205,024 tons of thermal and coking coal for week ended 0700 hours 20 May 2013, Newcast ...
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- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- VISA Power Limited - India
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
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