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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, 15 October 13
CHINA COAL IMPORTS TO KEEP GROWING IN THE YEARS TO COME, ALBEIT AT A SLOWER RATE - EVA TZIMA / NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest monthly report, shipbroker Intermodal highlighted the growing role of coal in the energy mix. According to Intermodal's research anal ...
Tuesday, 15 October 13
NEWCASTLE PORT SHIPPED 6.50% MORE COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 6.50 per cent week on week to 3.19 million mt for ...
Monday, 14 October 13
MEMR OF INDONESIA SETS THE COAL'S SPOT PRICE AT US$ 76.61 FOR OCT'13 DELIVERY
COALspot. com - The Indonesian government has revised down government declared coal bench mark price by US$ 0.28/ MT to US$ 76.61 for October 2013 d ...
Monday, 14 October 13
CARBON POLICIES UNLIKELY TO PREVENT A COAL-FUELLED WORLD - WOOD MACKENZIE
China will propel coal growth but US, Europe and Asia will sustain global demand.
At the World Energy Congress (WEC) today Wood Mackenzie's Pres ...
Sunday, 13 October 13
Q4'13 DELIVERY SUB-BIT INDO COAL SWAP FALLS SEVEN STRAIGHT WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 1.72 percept month on month on Friday 11 October 201 ...
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- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Australian Coal Association
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- PTC India Limited - India
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Planning Commission, India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- White Energy Company Limited
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- The University of Queensland
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
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