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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, 07 March 13
PANAMAX : POSITIVE TREND; CAPESIZE : GRADUALLY SLIDE - FEARNLEYS AS
Handy
The Atlantic saw more cargoes than last week and rates ticking upwards. The USG-Feast was at USD 22k and Black sea-feast was at USD 12k. The ...
Tuesday, 05 March 13
NEWCASTLE PORT SHIPPED 20.77 PERCENT MORE COAL W/E 4 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2,631,562 MT of thermal and coking coal for a week ended 0700 hours 4 March 2013, Newcas ...
Sunday, 03 March 13
INDONESIAN THERMAL COAL SWAPS; CHINA CONTRACTS FALL W-O-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 0.75 percent and CFR South China coal shipment&nbs ...
Sunday, 03 March 13
FREIGHT MARKET FROM INDONESIA EXPECTED TO BE FIRM - VISTAAR
COALspot.com – The freight market has been fairly firm this week except for cape size index.
The BDI was up by 4.64 points closing at 776 p ...
Thursday, 28 February 13
INDIA HAS INCREASED CUSTOMS DUTY AND COUNTERVAILING DUTY FOR POWER PLANT COAL
COALspot.com : The government of India raised basic customs duty and countervailing duty on steam coal. In the meantime government has reduced& ...
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- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Minerals Council of Australia
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- VISA Power Limited - India
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
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