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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, 18 April 13
HANDY: STABLE ; PANAMAX: BUSY WEEK - FEARNRESEARCH
Handy
The Atlantic markets remain stable in this week. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 12k. The Pacific market is bit f ...
Thursday, 18 April 13
FEATURE: PREDICTING THE FUTURE - AND THE PAST - BIMCO
It’s not predicting the future that is problematical, it’s the realisation that you have to relive the past again and again when you fai ...
Wednesday, 17 April 13
INDONESIA SHIPPED 80 MILLION TONS OF COAL IN FIRST QUARTER - COAL DIRECTOR
COALspot.com - Indonesia has exported around 80 million tons of coal including power plant coal in first three months of this year.
Speaking on t ...
Tuesday, 16 April 13
AUSTRALIAN NEWCASTLE PORT'S COAL EXPORTS JUMPED 20.87 PER CENT ON WEEK TO 3.07 MMT
COALspot.com - Newcastle port in Australia has loaded 3,077,431 tons of thermal and coking coal for week ended 0700 hours 15 April 2013, Newca ...
Monday, 15 April 13
SUB - BIT INDONESIA COAL SWAP SHOWS POSITIVE TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 2.70 percent and CFR South China coal shipment&nbs ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Mjunction Services Limited - India
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Australian Coal Association
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Coal and Oil Company - UAE
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