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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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Thursday, 17 October 13
CHINA'S COAL IMPORTS DOWN 9.4% TO 25.96 MMT IN AUGUST
COALspot.com: China's August Imported coal volumes down 9.4% m-m but up 27% y-y, BNP said in its latest China Coal & Power report released on 1 ...
Wednesday, 16 October 13
NEW STRATEGIES AND OPPORTUNITIES IN A RAPIDLY EVOLVING COAL INDUSTRY
The 12th Annual Coal Markets assumes even more significance as the industry seeks more market information, inputs on trade strategies, supply and de ...
Wednesday, 16 October 13
CAPES: RATES DROPPED; PANAMAX: ADVANCED - INTERMODAL
After a month and a half of straight weekly positive closings, the BDI has finished the week in the red. Monday started slow as holidays in the East ...
Wednesday, 16 October 13
WILL THIS LATEST DRY BULK MARKET UPTREND PROVE TO BE AS LONG-LIVED OR JUST ANOTHER MOMENTARY SPIKE? - CHRISTOS MANZTIOS
COALspot.com: So here we are again facing the same old question: Will this latest market uptrend prove to be as long-lived as all owners hope or jus ...
Wednesday, 16 October 13
KOSEP TO IMPORT 0.49 MILLION TONS OF 4600 NAR COAL FOR JAN - FEB '14
COALspot.com - Korea South-East Power Co., a Korean generator and distributor of electricity on behalf of five Korean Gencos intends to procure 490, ...
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- Trasteel International SA, Italy
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- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
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- MS Steel International - UAE
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- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
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- Mjunction Services Limited - India
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- Romanian Commodities Exchange
- Indika Energy - Indonesia
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- The Treasury - Australian Government
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- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
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- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
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- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
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- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
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