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Wednesday, 15 October 14
DRY BULK SHIPPING: RATE IMPROVEMENTS ARRIVED AS FORECAST, BUT UNCERTAINTY MOUNTS FOR 2015 DEMAND - BIMCO
 BIMCO released its latest short term assessment of the dry bulk market, estimating that over the October-November period, the level of Capesize TC average rates will rise from the current level below the USD 10,000 per day mark. Once the belated, but still anticipated, rush of Brazilian iron ore spot cargoes enter the market, freight rates should be volatile around USD 8,000-23,000 per day. Panamax TC average rates will remain around USD 5,000-10,000 per day. For the Supramax segment, BIMCO forecasts freight rates in the USD 8,500-13,500 per day range, whereas Handysize freight rates are expected around USD 6,500-9,500 per day.
According to the report, “while we await the long-anticipated rebound in Capesize freight rates centred on Brazilian exports, let’s focus on the brighter spots elsewhere in dry bulk shipping. Panamax freight rates are dragging along, as the oversupply is still clearly felt in the freight market. Fortunately, the erratic movements have now been mostly upward since the bottom-out on 27 June at USD 3,362 per day. Since then, freight rates have more than doubled to USD 7,101 per day, but this is still very different from delivering healthy earnings to owners and operators as the present ones are barely covering OPEX.
Supramaxes and Handysizes live a less volatile life than their larger peers do, and the rebound is clearly felt and seen, moving from the lower end of BIMCO’s forecast freight rate interval to the top for Handysizes, with Supramaxes still firming to close the gap completely.
Freight rates for all four segments have performed as forecast in our last report; a positive development without fireworks. The only disappointment was the fact that Capesize freight rates only reached USD 17,670 per day on 10 September and have since then slid down to USD 11,000 per day”.
BIMCO’s Chief Shipping Analyst, Mr. Peter Sand added that “the development in the sub-Capesize ship sizes mirrors very well what we have experienced in terms of demand. The weak development of coal cargoes into China has given some softness to the Panamax market, with Indian imports failing to make up for all the lost demand. In the meantime, the Supras and Handies have both benefitted from the strong demand for minor bulks. On top of that, we have surging Indian coal imports up by 19% year-onyear to 16 million tonnes in September, as busy power companies went on a buying spree at low international prices. The grain export season is also up and running now across the northern hemisphere. Even the exports of wheat and barley from Ukraine have contributed positively to the market, despite the difficult situation Ukraine is facing due to the stand-off with Russia. Russia’s exports of the same commodities are also very high and projected to hit record levels this year as the season progresses. Russian exports in August were at a record high of 4.2 MT according to USDA, as seasonality spikes exports. In Ukraine, exports are strong too at 3.3 MT in both August and September, according to BIMCO data.
SUPPLY
In terms of supply, BIMCO noted that “the dry bulk carrier fleet has grown by 3.6% in the first nine months of the year – 37.8 million DWT (486 units) have been delivered, offset by 11.5 million DWT (213 units) being demolished. One-third of the total added capacity came in the form of 66 Capesizes and 1 Valemax. In addition to that, 144 Panamaxes, 150 Supra-/Handymax and 125 Handysizes entered the active fleet. BIMCO forecast the total level of newbuilt deliveries for 2014 to reach 55 million DWT, with the current forecast for 2015 heading for a slightly lower level than that. Since our last report, the order book for 2016 has built up to reach 60 million DWT. With demolition expected to remain somewhat unchanged, this will again increase the pressure on the fundamental supply-demand balance as the fleet could expand by almost 6% again, up from 5.2% projected for 2015. Fortunately, the newbuilding contracting activity has been more subdued in 2014 as compared to the rush of 2013, where 102 million DWT of new orders were placed. At the beginning of October 2014, the year-to-date contracting volumes stood at exactly half that of the full year 2013. 2014 is therefore heading for a significant slowdown from 2013, but still a level that does not support an improved market balance going forward unless it is combined with a strong demolition activity, which BIMCO does not expect to happen”.
Outlook
Meanwhile, “the poor state of the freight market has naturally also affected asset values in a negative way. At the beginning of October 2014, Capesize ships made most of the gains from the early parts of the year, while the three smaller segments are in the red by 7% to 20% – the older the ship the bigger the lost value as assessed by Vesselvalue.com. Uncertainty mounts around the future imports of coal into India. This follows the ruling by India’s Supreme Court to deem illegal 214 out of 218 coal-block licences allocated to various companies from 1994-2010, of which 42 are being worked. Following a six month grace period given prior to the closing of the mines, only four could potentially continue operations. Should this become reality, significant seaborne imports will follow once the stockpiles have been run down. Nevertheless, it is too early to know if only four mines will continue to operate beyond 24 March 2015. Imports are likely to come from South Africa, as India favours the higher quality to the higher ash content (23%) coal imports from Australia, which is seeking new buyers, with China potentially shying away from imports of thermal coal with an ash content higher than 16% from 1 January 2015″.
According to the report, “these are two wild cards for the seaborne coal trade next year if implemented as described. The oversupply of iron ore into the market has dragged prices to the floor. In September 2014, iron ore prices reached a five-year low for 62% Fe content delivered at Qingdao, China, as it went below USD 80 per tonnes. This low level does not reflect poor demand conditions for iron ore or lower steel production in China, which is up by 5% in the first eight months of 2014. However, the lower iron ore prices may push forward a higher Chinese import level, as domestic production can be squeezed out because of higher production costs, as well as lower commodity prices tending to spur increased seaborne demand”, BIMCO concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Thursday, 16 October 14
PANAMAX OWNERS RECEIVE A PREMIUM FOR GOING TO INDIA VIA INDONESIA - FEARNLEYS AS
Handy
The Handy/Supra market continues to slide in both hemispheres, said Fearnleys AS in its latest week report. In the Atlantic we see rates co ...
Thursday, 16 October 14
ARE WE GOING TO SHOOT OURSELVES IN THE FOOT ONCE AGAIN? - PANOS MAKRINOS
As the East part of our globe was coming back from its October holidays last week, everyone expected that the Dry Bulk market would follow suit and ...
Wednesday, 15 October 14
PANAMAX: ACTIVITY IN THE PACIFIC WAS UNIMPRESSIVE
The Dry Bulk market noted another weekly decline last week, while the BDI moved below 1,000 points taking down with it expectations that a post hol ...
Wednesday, 15 October 14
INDONESIAN COAL PRICE REFERENCE FELL TO FRESH MULTI-YEAR LOWS IN OCTOBER
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in October 2014.
...
Wednesday, 15 October 14
SHIPOWNER NOT LIABLE FOR CARGO DAMAGE RESULTING FROM POOR STOWAGE - CLYDE & CO
KNOWLEDGE TO ELEVATE
Russian metal trading company Yuzhny Zavod Metall Profil (YZMP), the holder of a CONGEN 1994 bill of lading, took delivery o ...
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- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- PTC India Limited - India
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
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