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Friday, 11 October 13
DRY BULK FREIGHT RATE POSITIVE MOMENTUM TO BE SUPPORTED BY HIGHER DEMAND SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
BIMCO released its latest short term research on the shipping markets, estimating that the elevated level of Capesize TC average rates is fragile, but forecasts rates to stay around USD 20,000-35,000 per day. Panamax TC average rates will settle in at USD 8,500-15,000 per day. For the Supramax segment, BIMCO forecasts freight rates in the USD 9,500-13,500 per day interval, whereas Handysize rates are expected to continue with low volatility in the interval of USD 7,500-9,500 per day.
According to BIMCO's head of shipping analysis, Mr. Peter Sand, "entering the fourth quarter of 2013, our optimism is intact and demand expected to remain supportive to freight rates; maybe not at levels as strong as the recent Capesize peak, but we are certain that Q4 will return the highest average of any quarter in 2013. In 2013, Chinese steel production has gone up more than 6% every month compared to the same month last year, and iron ore imports have followed suit. Imports of iron ore totalled 69 million tonnes in August 2013, a small step down from the record high of July, but still the second-highest this year so far. The large production of steel also meant increasing amounts of steel exports – handing improved opportunities for better back-haul trade to owners and operators" he said.
According to the report, "the historical seasonality, as well as the current solid demand for long hauls of iron ore and grains going from the Atlantic into the Pacific, makes a believable case. In combination with a steady delivery scheme that will slow down even further next year, we are on course for an improved market balance. The tables may have turned already, despite the slowdown in demolition activity. Nevertheless, it remains fundamental that demand needs to exceed supply in order to improve the market balance, a balance that is affected largely by the widespread application of slow steaming", BIMCO said.
It added on its outlook of the dry bulk market that "when freight rates go up, slow steaming is likely to be amongst the first “sacrifices” because of narrow considerations regarding bunker costs. Stronger rates could spur owners and operators to speed up to cater for increased demand. The path back to higher levels of utilization is paved with volatile freight rates that are backed-up by a higher and higher “rate-floor” that eventually brings around sustainable earnings across the board once again. The fact is that the active fleet is capable of catering to a much higher level of demand than at present if normal service speed is applied in the market place", BIMCO noted.
SUPPLY
Supply-wise, BIMCO noted that "while freight rates headed North, demolition volumes went South. This has led BIMCO to revise the demolition forecast for 2013 downwards. Because of unchanged expectations to deliveries, the fleet growth for 2013 is now one percentage-point higher than previously at 6.7%. In the first half of 2013, a monthly average of 2.2 million DWT was demolished, but the third quarter of the year has only seen demolished tonnage to the tune of 1.1 million DWT (monthly average). This revision proves how sensitive the supply side is when it comes to lifting the foot off the demolition throttle. an almost complete stop, with just six ships at an average age of 24 years sold to the breakers since 1 July. The total order-book is moving sideways these days, with new contracts and newbuilds matching each other. Half of all new capacity ordered is for Capesize tonnage, which is quite a comeback in terms of interest for this oversupplied segment", BIMCO's report said.
Actually, Capesize tonnage is in such high demand that the total 2013 orders now surpass the combined Capesize orders in 2011 and 2012. "The lion’s share of the new contracts are set for 2015 delivery. 46 million DWT delivered and 17 million DWT leaving the fleet means that the overall dry bulk fleet has increased by 4.4% in 2013. For the Capesize segment, demolition activity has naturally come to an almost complete stop, with just six ships at an average age of 24 years sold to the breakers since 1 July.
The renewed optimism in dry bulk shipping has also resulted in Panamax newbuilding prices leaving the floor to go higher – as the last segment to do so. A 77,000 DWT Panamax can now be contracted at USD 26.5 million, whereas a 180,000 DWT Capesize inched higher.
last week to reach USD 49 million, according to Intermodal. Having said that, Panamax orders are almost out of fashion, with just 59 new contracts for 4.8 million DWT signed in 2013. It follows the pattern of Capesizes that only saw 36 new contracts made in 2012 when that market bottomed out", the report noted.
DEMAND
Demand-wise, BIMCO noted that it's been a joyride for Capesize owners in September. During that month, freight rates lifted from the USD 10,000-15,000 per day interval experienced from mid-June until the beginning of September, when the market caught fire in a big way. Then, rates climbed all the way to their peak on 25 September at USD 42,211 per day. Since then, they have backtracked somewhat, but are still hovering at very healthy levels, covering all the costs that are borne by owners and operators: OPEX, finance cost, depreciation and additionally, leaving some returns on equity as well for Capesize vessels. This has not been the case since December 2011. So what happened? Brazil came back strongly by lifting its share of the growing iron ore market from 13.0% in June to 19.7% in August – bringing it back to normal – while Australian exports stagnated. Given that there is a factor of 3 in sailing distances between Australia and Brazil, such a shift matters. The so-called “silent stimulus” from China and accompanying excessive lending at a point when iron ore prices had reached a low, caused steel mills to restock, as steel production also surged.
The record high steel production in August/September caused HRC steel prices to slide slowly during September. It may be an indicator of demand for tonnage easing off somewhat. This is backed by data from Commodore Research, showing that the number of vessels charted to ship iron ore to China peaked by mid-September, leaving the following weeks with lower activity levels", BIMCO noted.
It added that "during the September rally in the Capesize segment, the Capesize/Panamax freight rate ratio broke the 2.3 mark, making charterers split Capesize cargoes in two Panamax vessels if possible. This effect made the pulse in the Panamax market beat faster, bringing around a doubling of freight rates to just shy of USD 14,500 per day by end-September. Increased demand for coal has also proved to be a catalyst behind the recent upturn. The power plants of the world have taken advantage of the lower coal prices on the world market to run low stock due to oversupplied markets and import at lower prices when in need. The oversupply of coal in the Pacific Basin has squeezed out some of the strong levels of US coal exports we saw in the first quarter, reducing the positive effect on shipping demand from these long sailing distances", the report concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Friday, 01 November 13
DRY BULK MARKET IN FIRST POSITIVE SIGN IN DAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Owners of dry bulk carriers are well aware of the rollercoaster ride that has been the market for their vessels over the past few years. This trend ...
Thursday, 31 October 13
HANDY: ACTIVE; PANAMAX: QUIET; CAPESIZE: NO LIGHT
Handy
The handy market had an active week however not directly translated into the rates we´ve seen in the Pacific. We see more coal and baux ...
Wednesday, 30 October 13
INDONESIAN STATE OWNED COAL MINER HAS EXPORTED 7.02 MILLION TONS OF COAL IN 9 MONTHS
COALspot.com : PT. Bukit Asam, Indonesian state owned coal miner has sold 13.24 million tons of coal for the period January - September 2013. Accord ...
Wednesday, 30 October 13
DRY BULK MARKET HAS LOST FURTHER GROUND THIS PAST WEEK - INTERMODAL
Chartering (Wet: Firm+ / Dry: Stable-)
The Dry Bulk market has lost further ground this past week, as de-creased activity in both basins for both C ...
Wednesday, 30 October 13
CAPESIZE: DOWNWARD; SUPRAS AND HANDIES: STABLE - INTERMODAL
The Dry Bulk market has resumed its downward movement, noting another dip for a third week in a row. The larger size segments were responsible for p ...
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- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- The University of Queensland
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
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