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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, 20 January 13
S7 & S8 ROUTE FREIGHT TREND IS EXPECTED TO BE FLAT TO SOFT THIS WEEK - VISTAAR
COALspot.com - The freight market was fairly steady with all the indices BDI up by 9.21 pct closing at 837 points. The Cape index was also sharply u ...
Friday, 18 January 13
NEWLEAD HOLDINGS LTD. TO ACQUIRE TWO COAL PROPERTIES WITH ESTIMATED COAL RESERVES OF 18.6 MMT & 143.1 MMT
NewLead Holdings Ltd. Announces Signing Agreement to Acquire Properties with Estimated Coal Reserves of 18.6 Million Tons; Signing Agreement to Acqu ...
Friday, 18 January 13
DRY BULK MARKET ON THE RISE, ON STRONG DEMAND FOR CAPESIZE VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has continued its climbing trend yesterday, as the industry's benchmark, the Baltic Dry Index (BDI) was up by 39 points to 820. ...
Friday, 18 January 13
CAPESIZE : SIGNALS ARE MIXED BUT THE OVERALL TENDENCY IS POSITIVE - FEARNLEYS
Handy
The Atlantic market remained stable with USG-Feast fixed around USD 17k, according to fearnleys’s weekly report.
Continent / Medite ...
Tuesday, 15 January 13
GRANT SMITH APPOINTED GROUP MANAGING DIRECTOR OF BRAEMAR ADJUSTING
The Board of Braemar Adjusting is delighted to announce the appointment of Grant Smith as Group Managing Director of the company with immediate effe ...
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- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- VISA Power Limited - India
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Economic Council, Georgia
- PowerSource Philippines DevCo
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
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