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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, 21 March 13
HANDY : RBCT ROUNDS FIXED AT $ 9000 + 300K BB - FEARNRESEARCH
Handy
The Atlantic market remains firm with cargoes seen to support healthy rates as per last week. The USG-Feast was at USD 25k and Black Sea-Feas ...
Wednesday, 20 March 13
NTPC TO IMPORT SEVEN MILLION TONS COAL FOR FOUR MONTHS
COALspot.com : NTPC Limited (formerly National Thermal Power Corporation) is the largest Indian state-owned electric utilities company has awarded&n ...
Tuesday, 19 March 13
CHINA GAS PRICE REFORMS AND APAC GAS PRICING - FITCH STREET VIEW
Fitch Ratings says pricing reform in the Chinese gas sector is unlikely to materially impact gas distributors' margins, and low gas prices in the U ...
Tuesday, 19 March 13
NEWCASTLE COAL EXPORTS FALL BY 4.27 PERCENT ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,365,561 MT of thermal and coking coal for week ended 0700 hours 18 March 2013, Newcast ...
Tuesday, 19 March 13
SHIP PRICES COULD BE CLOSING IN TO REACH THEIR BOTTOM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
One of the latest developments in shipping asset prices has been the reluctance from shipyards to further reduce their price expectations to higher ...
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- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Parliament of New Zealand
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Planning Commission, India
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- The University of Queensland
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Australian Coal Association
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
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