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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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- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Minerals Council of Australia
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Planning Commission, India
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
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