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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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Friday, 29 March 13
SUB-BIT INDONESIA COAL SWAPS: UP 0.55 % WOW; CFR SOUTH CHINA COAL CONTRACT: UP 0.23 % WOW
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 0.55 percent and CFR South China coal shipment&nbs ...
Thursday, 28 March 13
SHIP OWNERS KEEN ON ACQUIRING SECOND HAND TONNAGE, AS WELL AS NEW BUILDINGS IN CONVENTIONAL SEGMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The recent rally of the Baltic Dry Index (BDI), coupled with renewed optimism, at least in some parts of the wet market, have prompted many ship own ...
Wednesday, 27 March 13
PTBA HAS CONCLUDED US$ 16.14 BILLION WORTH OF COAL SALES AND PURCHASE AGREEMENT WITH PLN
COALspot.com - PT. Bukit Asam, a 32 years old Indonesian state owned coal miner has signed a coal sales and purchase agreement with PT PLN, (a state ...
Wednesday, 27 March 13
SHIPPING CONFIDENCE REACHES HIGHEST LEVEL FOR TWO YEARS - MOORE STEPHENS
Overall confidence levels in the shipping industry recovered to their highest level for two years in the three months ended February 2013, according ...
Tuesday, 26 March 13
NEWCASTLE PORT SHIPPED 2.39 MMT OF COAL W/E 25 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2.396 million tons of thermal and coking coal for week ended 0700 hours 25 March 2013, N ...
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- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- The University of Queensland
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Planning Commission, India
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
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