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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, 26 September 13
DRY BULK MARKET KEEPS ON RALLYING ON THE BACK OF HIGH CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its momentum over the course of the past week, on the back of increased demand for Capesizes and an improvement of mark ...
Wednesday, 25 September 13
RBCT'S COAL EXPORT DECLINES IN AUGUST
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest coal export terminal in South African as well as in the world has shipped 16. ...
Wednesday, 25 September 13
CAPES TOUCHING RATES NO ONE BELIEVED COULD BE ACHIEVED IN 2013 - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market is the gift that keeps on giving these days. With rates for Capes touching numbers ...
Wednesday, 25 September 13
IS IT TIME AGAIN TO SUPERSIZE AGAIN? - GEORGE LAZARIDIS
After an early arrival of the seasonal rally in the Capesize market, things look to be on the upbeat for these dry bulk giants. With the Index reach ...
Monday, 23 September 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 3 PERCENT LESS COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 3 per cent week on week to 2.92 million mt for t ...
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- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Australian Coal Association
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- PTC India Limited - India
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
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