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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, 01 October 13
DRY BULK MARKET POISED FOR RETREAT ON CHINA HOLIDAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The start of a national weeklong in China as of Tuesday is expected to put a lid in the latest rally of the dry bulk freight market, as has always b ...
Monday, 30 September 13
NEWCASTLE'S COAL EXPORT VOLUME CONTINUES TO SLIP
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 8.38 per cent week on week to 2.67 million mt fo ...
Monday, 30 September 13
PANAMAX CHARTER RATES TOUCHING US$ 18K FOR A TRIP TO NOPAC - CAPT. REDDY
COALspot.com : The freight market continued to remain firm, BDI and the Panamax index up week ended 27 September 2013.
The cape index was fell to ...
Sunday, 29 September 13
API 8 CFR SOUTH CHINA COAL Q3 2014 DELIVERY SWAP GAINED $1.19 M-O-M
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 ...
Sunday, 29 September 13
SUB-BIT INDONESIA COAL SWAP FELL ON MONTH AND WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 3.93 percept month on month on Friday 27 September 2 ...
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- Renaissance Capital - South Africa
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- Bhushan Steel Limited - India
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- Economic Council, Georgia
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- Australian Coal Association
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- Tata Chemicals Ltd - India
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- Minerals Council of Australia
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- IHS Mccloskey Coal Group - USA
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- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
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- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
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- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
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- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
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- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
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- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
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- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
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- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
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- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
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- Bulk Trading Sa - Switzerland
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- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
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