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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, 01 May 13
NEWCASTLE PORT SHIPPED 23.14 PER CENT MORE COAL WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,997,729 tons of thermal and coking coal for week ended 0700 hours 29 April 2013, Newca ...
Tuesday, 30 April 13
KATINGAN RIA THERMAL COAL TO START PRODUCTION FROM EARLY 2014
COALspot.com - Realm Resources Ltd. (ASX: RRP) has announced the completion of the Feasibility Study for its 51% owned Katingan Ria thermal co ...
Monday, 29 April 13
FIRST TRADES OF SGX API 8 CFR SOUTH CHINA COAL SWAP
COALspot.com - The SGX API 8 CFR South China Coal Swap went live for clearing on SGX-DC today with a total volume of 25,000 metric tonnes (25 lots). ...
Sunday, 28 April 13
SUB BIT INDONESIA COAL & CFR SOUTH CHINA COAL SWAPS STAY POSITIVE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average May 2013 delivery has gained 0.34 percent and CFR South China coal shipment gai ...
Sunday, 28 April 13
PANAMAX FREIGHT COULD BE SOFT NEXT WEEK - CAPT. REDDY
COALspot.com - This BDI closed slightly lower at 871 points (down by 1.91 pct) mainly due to drop in the Panamax index by almost 10 pct.
Th ...
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- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- ASAPP Information Group - India
- The University of Queensland
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Planning Commission, India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- VISA Power Limited - India
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Videocon Industries ltd - India
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