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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, 14 March 13
SHIPPERS AND CARRIERS NEED GREATER COMMUNICATION AND MUTUAL UNDERSTANDING
Press Release – Shippers and shipping lines both need to raise their game if global container supply chains are not to be habitually subject t ...
Wednesday, 13 March 13
NEWBUILDING PRICES EXHIBIT NO FALL IN PAST SIX MONTHS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the fact that oversupply has been the key plague of the shipping markets in recent years and newbuilding ordering activity has receded subst ...
Tuesday, 12 March 13
COAL MINING PRIVATIZATION IN INDIA: MUST - SUNIL K KUMBHAT
COALspot.com - India has the one of the richest coal reserves in the world and the country should have shown significant progress and gained the pos ...
Tuesday, 12 March 13
NEWCASTLE PORT SHIPPED 2.47 MILLION TONS OF COAL W/E 11 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2,471,080 MT of thermal and coking coal for week ended 0700 hours 11 March 2013, Newcast ...
Monday, 11 March 13
SUB-BIT FOB INDONESIA COAL SWAPS FELL 1.41 PERCENT W-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 1.41percent and CFR South China coal shipment ...
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- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Australian Coal Association
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- VISA Power Limited - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
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