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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, 04 April 13
HANDY:QUIET ; PANAMAX: SLOW START; CAPESIZE: LOW ACTIVITIES - FEARNRESEARCH
Handy
The Atlantic markets remain quiet as charterers and owners waiting to see how it moves. The USG-Feast was at USD 20k and Black Sea-Feast was ...
Wednesday, 03 April 13
HBA HAS LOST US$ 1.53 PER MT IN APRIL 2013
COALspot.com - The Indonesian government’s declared coal bench mark price has lost $1.53 / MT in April 2013.
The monthly coal referen ...
Tuesday, 02 April 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 633K MT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 3,029,482 tons of thermal and coking coal for week ended 0700 hours 1 April 2013, Newcas ...
Tuesday, 02 April 13
THE GOVERNORS TO TAKE OVER AUTHORITY OF MINING, FORESTRY AND PLANTATION CONCESSIONS
The Indonesian government is planning to transfer the authority of issuing mining, forestry and plantation concessions from municipalities and distr ...
Sunday, 31 March 13
COAL FREIGHTS ARE IN FLAT TO WEAK TREND - VISTAAR
COALspot.com - This freight market after several weeks of firming up seemed to lose steam and this week all the indices were down except for handy s ...
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- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
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