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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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Wednesday, 20 February 13
BAKRIE GROUP LOOKS TO HAVE A CLEAR UPPER HAND - LUCKY ARIESANDI, CFA
The Bakrie-Rothschild saga is entering its final stage, with Bumi Plc (BUMI LN)’s holders to convene on 21 Feb at 11am GMT to vote on Nat Roth ...
Tuesday, 19 February 13
NEWCASTLE PORT SHIPPED 38.65 PERCENT LESS COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 1,820,559 MT of thermal and coking coal for week ended 0700 hours 18 February 2013, Newc ...
Monday, 18 February 13
78.75 MILLION TONS OF COAL RESERVES ARE NEWLY PROVEN IN WUGANG HUNAN PROVINCE
COALspot.com - Recently, Wugang City, known as the CHINA hundred key coal producing cities, achieved new breakthroughs in coal exploration: deep coa ...
Sunday, 17 February 13
STEEL DEMAND WILL HELP TO PUSH UP FREIGHT RATES - VISTAAR
COALspot.com - This freight market has been fairly steady week ended 15 February 2013.
The BDI was slightly up by 0.67 pct closing at 753 points ...
Friday, 15 February 13
2ND ANNUAL INDONESIA MINING 2013 CONFERENCE
Bringing Indonesia's Mining Stakeholders Together Towards Improving Mining Investment Climate & Operations
Following the success of th ...
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- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- The University of Queensland
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- VISA Power Limited - India
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Australian Coal Association
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
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