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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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Tuesday, 29 October 13
NEWCASTLE PORT SHIPPED 12.29 PER CENT MORE COAL W-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 12.29 per cent week on week to 3.61 million mt for ...
Monday, 28 October 13
API 8 CFR SOUTH CHINA COAL FOR Q3'14 DELIVERY LOST ON D-D,W-W & M-M
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.22 percept M-M on Friday 25 October 2013. The CFR South China Co ...
Monday, 28 October 13
COAL SWAP FOR Q3' 2014 DELIVERY LOST ON D-D, W-W AND M-M
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery gained 0.46 percept month on month on Friday 25 October 2 ...
Saturday, 26 October 13
PANAMAX CHARTER RATES FROM INDONESIA TO INDIA STAY FIRM - SOLYM
COALspot.com: The freight market showed tendency of softness with Cape and Panamax futures and physical soft.
The BDI was down by 12 pct week end ...
Saturday, 26 October 13
DRY BULK MARKET KEEPS ON RETREATING, BUT NEW BUILDING ORDERS KEEP ON PILING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market kept on retreating this week, with the industry's benchmark, the Baltic Dry Index (BDI) falling to 1,708 points, down 78 on the ...
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- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Aditya Birla Group - India
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Planning Commission, India
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
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