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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, 22 October 13
NEWCASTLE PORT SERVED 38 OCEAN GOING VESSELS IN A WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 0.64 per cent week on week to 3.21 million mt for ...
Tuesday, 22 October 13
KOWEPO INVITED BIDS FOR MULTI GRADE COAL
COALspot.com - Korea Western Power Co., Ltd. (KOWEPO), a Korean electricity generator intends to procure 240,000 tons of multi grade coal for its Ta ...
Monday, 21 October 13
SOUTH CHINA COAL SWAP FOR 2014 DELIVERIES SHOW A POSITIVE TREND
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.02 percept M-M on Friday 18 October 2013. The CFR South China Co ...
Sunday, 20 October 13
Q3'14 SUB-BIT INDO COAL SWAP CLOSED AT $ 61.80 PMT W/E 18 OCT' 13
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 0.93 percept month on month on Friday 18 October 201 ...
Saturday, 19 October 13
NICKEL ORE SHIPMENTS KEEP SUPRAMAX CHARTER RATES STEADY - CAPT. REDDY
COALspot.com : The futures freight market continued to go down which was reflected in the physical markets as well.
The BDI continued to be soft ...
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- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- White Energy Company Limited
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- The University of Queensland
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
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