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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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Saturday, 27 April 13
HANDY : SLIDING ; PANAMAX : POSITIVE ; CAPESIZE : STILL ON ITS KNEES - FEARNRESEARCH
Handy
The Atlantic markets started sliding with no fresh cargoes seen in the market. The USG-Feast was at USD 18k and Black sea-Feast was at USD 11 ...
Saturday, 27 April 13
2ND CHINA INTERNATIONAL SHALE GAS SUMMIT
Press Release - 2nd China International Shale Gas Summit, 10-13 September 2013 | Chengdu, China
*The largest annual event for the shale gas indus ...
Friday, 26 April 13
LIMA SUMMIT IN JULY TO HIGHLIGHT LATIN AMERICAN MINING POTENTIAL
COALspot.com - Latin American mining industry officials and their private sector counterparts will be gathering in Lima, Peru on July 1-2 for the La ...
Wednesday, 24 April 13
FUTURE US POWER MARKET SHARES OF COAL, NATURAL GAS GENERATORS DEPEND ON RELATIVE FUEL PRICES - EIA
COALspot.com - In recent years, in US, natural gas competed more effectively with coal as a fuel for electricity generation as the cost of operating ...
Tuesday, 23 April 13
INDONESIAN STATE OWNED COAL MINER SHIPPED 4 PERCENT MORE COAL IN 1Q
COALspot.com - PT. Bukit Asam, the Indonesian state owned coal miner shipped more coal in first quarter of this year compared to the same period in ...
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- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- VISA Power Limited - India
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- The University of Queensland
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
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