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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, 13 April 13
THE FREIGHT MARKETS EXPECTED TO HOLD FIRM NEXT WEEK - CAPT. REDDY
COALspot.com - This freight market firmed up this week and all sectors were up except for Supramax index.
The BDI was up by 1.62 pct closing at 8 ...
Friday, 12 April 13
DRY BULK SHIP OWNERS DEVELOPED NEWFOUND APPETITE FOR BULKERS DURING FIRST QUARTER OF 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's official; more and more ship owners operating in the dry bulk market appear to have developed a newfound optimism in the market's prospects. ...
Thursday, 11 April 13
HANDY: INDO - INDIA NOW BEEN REPORTED AT APS BASIS AT USD 10K+BB 85K - FEARNLEYS
Handy
The Atlantic markets remain with not many cargoes seen this week. The USG-Feast was at USD 18k and Black Sea-Feast was at USD 12k. The Pacifi ...
Thursday, 11 April 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 15.96 PERCENT LESS COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,545,914 tons of thermal and coking coal for week ended 0700 hours 8 April 2013, Newcas ...
Thursday, 11 April 13
TNEB HAS OPENED 4.2 MILLION TONS IMPORTED COAL TENDER
COALspot.com - TANGEDCO, the state run utility TANGEDCO (formerly known as TNEB), Tamil Nadu state owned electricity company has opened bids to purc ...
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- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Marubeni Corporation - India
- White Energy Company Limited
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Planning Commission, India
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
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