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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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Tuesday, 14 May 13
NEWCASTLE PORT'S COAL EXPORTS FALL 6.83 PERCENT
COALspot.com - Newcastle port in Australia has loaded 2,771,891 tons of thermal and coking coal for week ended 0700 hours 13 May 2013, Newcast ...
Monday, 13 May 13
SGX ASIACLEAR OTC COAL SWAPS : RELATIVELY STABLE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average June 2013 delivery has gained 0.15 percent and API 8 CFR South China Coal shipment&nb ...
Saturday, 11 May 13
INDONESIA TO INDIA COAL FREIGHT RATES ARE EXPECTED TO BE FLAT TO SOFT NEXT WEEK
COALspot.com - This week the market remained flat compared to last week. BDI slightly up 0.68 pct and closed at 884 points and the cape size index u ...
Friday, 10 May 13
U.S. PRODUCED TOTALED APPROXIMATELY 18.5 MMST OF COAL W/E 4 MAY 2013
COALspot.com - U.S. produced totaled approximately 18.5 million short tons (mmst) of coal in a week (For the week ended 4 May, 2013), EIA said in it ...
Thursday, 09 May 13
KILLARA AUSTRALIA ACQUIRES 80% INTEREST IN BORNEO EMAS HITAM
COALspot.com - Killara Resources has announced that, the company has signed a binding MoU to acquire an 80% equity interest in PT. Borneo Emas Hitam ...
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- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Australian Coal Association
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
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