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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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Monday, 11 February 13
NEWCASTLE PORT SHIPPED 23.01 PERCENT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,967,761 MT of thermal and coking coal for week ended 0700 hours 11 February 2013, Newc ...
Sunday, 10 February 13
INDONESIA SUB-BIT SWAPS: "UP" - CFR SOUTH CHINA SWAPS: "DOWN"
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 0.72 percent W-O-W and CFR South China coal shipme ...
Sunday, 10 February 13
DRY BULK OVERSUPPLY OF TONNAGE SEEN WANING IN THE COMING MONTHS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It seems that the tide could be shifting in the dry bulk market, in terms of tonnage oversupply, according to the latest data figures. This could ex ...
Sunday, 10 February 13
HIGHER BUNKER PRICE PUSHES SEA FREIGHTS FIRM - REDDY
COALspot.com - The freight market was soft and all at same levels with Chinese year holidays next week.
The BDI was slightly down by 0.27 pct ad ...
Friday, 08 February 13
NORTH P&I CLUB WARNS OF LIQUEFACTION RISK FOR BAUXITE CARGOES
The ‘A’ rated 170 million GT North P&I club has warned shipowners carrying bauxite aluminium ore cargoes that they have the potentia ...
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- Deloitte Consulting - India
- Marubeni Corporation - India
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- The University of Queensland
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
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