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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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Tuesday, 05 February 13
CHALLENGER DEEP RESOURCES CORP HAS ENTERED INTO AN EXCLUSIVE MINING AND MARKETING AGREEMENT WITH KEM
COALspot.com - Challenger Deep Resources Corp., through its wholly owned subsidiary, PT Bestindo Energy, has entered into an Exclusivity Agreement r ...
Saturday, 02 February 13
ADARO TO INTRODUCE A NEW BRAND OF ENVIROCOAL, E4700, IN 2013
COALspot.com - Adaro Energy, an Indonesian and leading coal producer in country has achieved a record coal production during 4Q12 of 13.31 mil ...
Saturday, 02 February 13
FREIGHT MARKET MAY REBOUND AFTER CHINESE NEW YEAR - VISTAAR
COALspot.com - The freight market was soft and all the indices were down by around 5-7 pct this week.
The BDI was down 6.01 pct closing at 750 po ...
Friday, 01 February 13
ORPHEUS SELLS B26 COAL PROJECTS FOR US$ 2 MILLION TO FOCUS ON SOUTH KALIMANTAN
COALspot.com - Orpheus Energy Limited (ASX: OEG) has announced that it has sold its 51 percent equity stake in the East Kalimantan coal projects, Bl ...
Friday, 01 February 13
HANDY - FLAT; PANAMAX - FLAT TO WEAK; CAPESIZE - WEAK
Handy
The Atlantic market remained stable with no significant movement in rates. Rates from USG to FEast were around USD 17k and Black sea to Feast ...
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- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- The University of Queensland
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Planning Commission, India
- PTC India Limited - India
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
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