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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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Sunday, 27 January 13
CFR SOUTH CHINA COAL SWAPS: WEAK
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery has gained 0.31 percent and CFR South China coal shipment&nbs ...
Sunday, 27 January 13
FREIGHT MARKET: FLAT TO SOFT - VISTAAR
COALspot.com - The freight market was soft and all the indices were down except for handy size.
The BDI was down 4.66 pct closing at 798 points.. ...
Friday, 25 January 13
BOTSWANA GOVERNMENT GRANTS COAL LICENSES TO A-CAP RESOURCES LIMITED
A-Cap Resources Limited has announced that it has been granted coal rights within its Bolau tenements which sit next to the Sese Coal and Power Proj ...
Friday, 25 January 13
SMALL ROOM FOR OPTIMISM FOR THE PROSPECTS OF THE DRY BULK MARKET AS NET FLEET GROWTH IS SLOWING DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market didn't manage to post a rebound during the past year, quite the opposite, as a fast fleet growth and slow ...
Thursday, 24 January 13
INDO - INDIA NOW AT APS $ 8K + BB USD 90000 - FEARNLEYS AS
Handy
The Atlantic market remains stable as supply of tonnage is still in excess of demand. USG- Far east fixed at $18k and CONT-FEAST at $ 11k. Pa ...
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- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- VISA Power Limited - India
- Aditya Birla Group - India
- Parliament of New Zealand
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- The University of Queensland
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Planning Commission, India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
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