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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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Sunday, 10 March 13
INDIA - INDONESIA SUPRAMAX FREIGHT : FIRM TREND
COALspot.com – This week freight market was raised and remained firm in all segments.
The BDI was up by 6.70 pct closed at 843 points, ...
Sunday, 10 March 13
INDONESIA'S FORESTRY DEPARTMENT IS TO INCREASE BORROW-TO-USE PERMITS (IJIN PINJAM PAKAI) FEE SOON
COALspot.com : Indonesia to increase borrows-to-use permit fees by 33.33 percent. The government of Indonesia is planning to increase the state&rsqu ...
Friday, 08 March 13
EKO SANTOSO BUDIANTO APPOINTED AS PRESDIENT DIRECTOR OF BERAU COAL ENERGY
COALspot.com - PT Berau Coal Energy has appointed Eko Santoso Budianto as new president director, replacing Rosan Roeslani. Berau’s extraordin ...
Friday, 08 March 13
INDONESIAN HBA UP FOR FIVE CONSECUTIVE MONTHS
COALspot.com - The Indonesian government has declared bench mark price for coal has moved upwards in March 2013.
The monthly coal reference ...
Friday, 08 March 13
DRY BULK MARKET ON A RISING TREND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has continued its rising pattern set after China opened up again for business, following the Asian New Year Holidays. As a resul ...
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- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- PTC India Limited - India
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
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