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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, 28 February 13
SHIP OWNERS EXPECTED TO FACE A CHALLENGING YEAR, DESPITE THE FALL OF NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Tonnage oversupply and a lagging growth in world trade demand are expected to keep shipping in the "red", despite a series of measures ado ...
Thursday, 28 February 13
PANAMAX : MARKET HAS SEEN A GOOD UPTURN OVER THE LAST WEEK - FEARNLEYS
Handy
The Atlantic saw more cargoes than last week and rates ticking upwards. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 11k. The ...
Wednesday, 27 February 13
NEWCASTLE PORT IN AUSTRALIA SHIPPED 0.358 MILLION MT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,178,869 MT of thermal and coking coal for week ended 0700 hours 25 February 2013, Newc ...
Wednesday, 27 February 13
NEWLEAD HOLDINGS LTD. ANNOUNCES COAL SUPPLY AND DELIVERY CONTRACT
NewLead Holdings Ltd. yesterday announced that the Company has signed an agreement to supply and deliver 1.48 million metric tons of steam coal to a ...
Tuesday, 26 February 13
10TH CLEAN COAL FORUM WILL BE HELD ON JUNE 2013
CDMC Events will be presenting the 10th Clean Coal Forum 2013 on June 13 - 14, 2013 in Beijing,China.
It will make you understand regulatory asp ...
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- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
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