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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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Wednesday, 09 October 13
PANAMAX: FIRM ; FIXING ACTIVITY INCREASED IN BOTH BASINS - INTERMODAL
This was another week of gains for the Dry Bulk market, albeit very modest ones compared to the previous ones. Charterers and owners struggled for t ...
Tuesday, 08 October 13
CHINA: INTENSE COMPETITION AMONG DOMESTIC COAL MINERS AS 2013 IMPORT DEMAND REMAINS STRONG - WOOD MACKENZIE
Prices will not fall under RMB500/t or risk supply availability to the coastal market
Despite China's lower economic growth, Wood Mackenzie says ...
Monday, 07 October 13
RICHARD BAY COAL TERMINAL SHIPPED 49.94 MMT OF COAL YTD
COALspot.com - Richards Bay Coal Terminal (RBCT), the world's single largest coal terminal has shipped 49,946,509 mt of coals YTD, according to por ...
Monday, 07 October 13
SOUTH AFRICA'S RBCT SHIPPED 7.94% MORE COAL IN SEPT' 13
COALspot.com - Richards Bay Coal Terminal (RBCT), the single largest coal export terminal in South Africa as well as in the world has shipped 7.94 p ...
Monday, 07 October 13
SGX - CFR SOUTH CHINA COAL SWAPS END ALMOST FLAT
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
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- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Minerals Council of Australia
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- PTC India Limited - India
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- The University of Queensland
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
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