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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, 24 January 13
DRY BULK MARKET FALLS ON TROPICAL CYCLONE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been on the downside during the past couple of days, mainly as a result of the tropical storm which forced ports to close do ...
Tuesday, 22 January 13
PORT OF ANTWERP HANDLES 7.0 PERCENT MORE COAL IN 2012 Y-Y
COALspot.com - The port of Antwerp handled 184,134,516 tonnes of freight last year.
This represents a drop of 1.6% compared with 2011, when the v ...
Monday, 21 January 13
NEWCASTLE PORT SHIPPED 10.21 PERCENT LESS COAL W/E 21 JANUARY 2013
COALspot.com - Newcastle port in Australia has loaded 2,804,152 MT of thermal and coking coal for week ended 0700 hours 21 January 2013, Newca ...
Monday, 21 January 13
PANAMAX DRY BULK CARRIERS AND AFRAMAX TANKERS PROVED TO BE THE "WEAPON OF CHOICE" FOR MOST SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With ship financing getting ever so difficult to procure during the past year or so, ship owners had to get creative in order to persuade banks and ...
Sunday, 20 January 13
Q1 & Q4 SUB-BIT FOB INDONESIA COAL SWAPS: FIRM
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) and CFR South China coal shipment for average Q1’ 2013 delivery have gained 0.81percent and ...
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- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- CNBM International Corporation - China
- White Energy Company Limited
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Parliament of New Zealand
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
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