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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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Thursday, 09 May 13
THE WORLD LARGEST POWER PLANT COAL EXPORTER SHIPPED 36 MILLION TONS OF COAL IN MARCH
COALspot.com: Indonesia, the world largest multi grade coal exporter has shipped 36.165* million tons of coal in March 2013.
Ac ...
Thursday, 09 May 13
DRY BULK SHIP OWNERS KEEP BUILDING NEW VESSELS ON THE BACK OF LOWER PRICES AND IMPROVED MARKET PROSPECTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the doom and gloom that the dry bulk market has experienced during the past couple of years and especially during 2012, ship owners have inc ...
Thursday, 09 May 13
HANDY : RBCT ROUNDS FIXED AT USD 8000 DOP ECI - FEARNRESEARCH
Handy
The atlantic market started to pick up with new orders. The USG-Feast was at USD 20k and Black sea-feast was at USD 12k. The pacific mkt rema ...
Wednesday, 08 May 13
PANAMAX VESSELS PROVE TO BE "STARS OF THE MONTH" FOR THE DRY BULK MARKET DURING APRIL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
They have taken a beating on various occasions during the past few years of the dry bulk market's crisis, but the fact remains, that despite the he ...
Tuesday, 07 May 13
NEWCASTLE PORT'S COAL EXPORTS HOLD STEADY WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,975,160 tons of thermal and coking coal for week ended 0700 hours 6 May 2013, Newcastl ...
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- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- The University of Queensland
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
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