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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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Friday, 27 September 13
TAIWAN'S FORMOSA TO IMPORT 140K MT OF BITUMINOUS COAL FOR Q4
COALspot.com : Taiwan's Formosa Plastics Group is inviting bids for 140,000 mt of bituminous coal for delivery in the Q4 for its China plant.
Ac ...
Friday, 27 September 13
CAPESIZES REGAINING PART OF THEIR FORMER GLORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The latest dry bulk market rally has been nothing short of spectacular, with freight rates more than doubling over the past few weeks. This growth h ...
Friday, 27 September 13
US PRODUCED 19.30 MMST OF COAL IN SEVEN DAYS
COALspot.com – United States the world’s second largest coal producer produced approximately 19.30 million short tons (mmst) of coal in ...
Thursday, 26 September 13
PANAMAX MARKET CONTINUE WITH STRONG RATES IN BOTH BASINS - FEARNRESEARCH
Handy
Feast rates are still firm, some fresh stems entered the market. Vessels trading around $15k passing Singapore for coal to India, and a bit l ...
Thursday, 26 September 13
INTERCARGO PUBLISHES BENCHMARKING BULK CARRIERS 2012-13 REPORT
The International Association of Dry Cargo Shipowners (Intercargo) has today launched Benchmarking Bulk Carriers 2012-13, the latest edition of our ...
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- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
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