Weekly Dry Bulk Report

Transcription

1 Week 51 -Shipbrokers and consultants since Weekly Dry Bulk Report Week 22 May 30th 2014 Capesize: BCI-TCA ending at US$5 190/ day. 23 per cent down w-o-w Panamax: Some increase in activity from ECSA to the East CAPESIZE Another week of falling rates in the Capesize market, with the BCI-TCA ending at US$5 190/ day, a 23 per cent fall from the end of the previous week. The BDI also saw a new record low on Wednesday at 471. In a market oversupplied by tonnage, insufficient cargo volumes and rates not covering OPEX, owners are still considering lay up of tonnage as an option. We can conclude with a weak Q4 in this last report of In the Pacific, the week ended with only Rio Tinto active in the market, seeking early January tonnage to move iron ore from Dampier to Qingdao. Rates offered were however low, with the C5 route for West Australia - Qingdao closing at US$3.2/mt this Friday, levels not seen since November In the Atlantic, Vale was reported possibly fixing two vessels on Wednesday to move iron ore from Tubarao to Qingdao at a rate of US$7.50/mt. The C3 route closed the week at US$7.1/mt, a 21 per cent fall from the end of last week and a 7-year low. Tight tonnage availability further north, set rates for Trans-Atlantic voyages opening in the Continent in the mid US$6 000/day. L&S INDEX OF DRY BULK STOCKS* *Basket of stocks for L&S Index includes: Golden Ocean Group Ltd., Western Bulk ASA, Scorpio Bulker s Inc., Paragon Shipping Inc., Diana Shipping Inc., DryShips Inc., Safe Bulkers Inc., and Star Bulk Carriers Corp. PANAMAX The BPI-TCA ended this week at US$3 410/day, a slight increase from the end of last week. A pre-holiday mood was starting to settle over the Panamax market, with a few charterers and owners looking to cover prior Christmas. This led to some increased activity from ECSA to the East resulting in slightly firmer rates. Coal trips from Hay point to Qingdao ranged between US$5.20/mt and US$5.50/mt, while trips with met coal from Hay point to the East Coast of India received around US$6.50/ mt. Coal trips from Richards Bay to Mundra and Krishnapatnam were reported at respectively US$6.30/mt and US$6.65/mt. There was some period activity this week, including a Chinese charterer fixing 2 Kamsarmax vessels for 11/14 months, at US$5 700/day and US$5 600/ day. 1

2 SUPRA/HANDYMAX A slow week for the Handy/ Supra sizes with the BSI-TCA ending at US$4 694/day, slightly flat from the end of last week. In the Pacific, an Ultramax was said to be on subjects from North China to the East Eoast of Australia with steel at a rate of US$4 000/day. A Supramax of dwt was fixed with coal DOP Japan via CIS, redelivery South Korea at a rate of US$5 000/day. In the Atlantic, An Ultramax open US Gulf was on subjects for a trip redelivery Singapore- Japan at US$11 000/day, a Supramax was reported taken from the US Gulf to China at the low US$9 000/day. In the Handy market, a dwt vessel was reported fixed in the low US$6 000/day basis delivery Odessa for a trip redelivery West Africa at US$6 100/day, according to The Baltic Exchange. The Baltic Exchange Dry Index Last Week This Week Trend Weekly Baltic Average BCI- TCA (US$/day) Softening Weekly Baltic Average BPI-TCA (US$/day) Softening Weekly Baltic Average BSI-TCA (US$/day) Softening Weekly Baltic Average BHI-TCA (US$/day) Softening Weekly BDI Average (US$/day) Softening FFA Last Week This Week Trend Calendar 16 BCI (US$/day) Softening Calendar 16 BPI (US$/day) Softening Calendar 16 BSI (US$/day) Firming 5TC+Q1 (Cape) (US$/day) Softening 5TC+Q2 (Cape) (US$/day) Softening 5TC+Q3 (Cape) (US$/day) Softening 5TC+Q4 (Cape) (US$/day) Softening Bunker Prices Last Week This Week Trend Rotterdam IFO 380 (US$/mt) Softening Rotterdam MGO (US$/mt) Softening Singapore IFO 380 (US$/mt) Softening Singapore MGO (US$/mt) Softening 2

3 Iron Ore Iron ore: Prices ending up 8.3 per cent w-o-w Iron ore: More Chinese mines expected to suspend production Iron ore spot prices ended the week at US$40.1/mt, a 8.3 per cent increase from the end of last week. Prices are expected to level around the US$40/mt mark going into next year, according to newly released forecasts from Goldman Sachs. Keeping in mind the suspension of BC Irons Nullagine mine in West Australia last week, industry players are expecting more closedowns of high cost mines if prices are sustained at today s level. Demand for iron ore is not looking to firm in the nearest future, according to Shanghai Steel Home, iron ore stocks at Chinese ports are building up, now reported to be at 89.5 million tons. A further slowdown in China s steel industry is expected as winter is coming up, meaning reduced construction activity. Going into 2016, steel output is expected to fall by around 23 million tons, equal to approximately 37 mill tons of iron ore of 62% content. With increased output of low cost high quality iron ore from the biggest miners in Australia and Brazil, we expect Chinese mines to continue suspending production next year as margins tighten. From January-November this year, we have seen an 8 per cent y-o-y fall in domestic production. On the back of Moody s expectations of continued falling metal prices and a negative view of the mining industry, Glencore s ratings have been downgraded to lowest investment grade, Baa3. Moody s do however believe that Glencore will manage to maintain its investment grade rating, despite falling commodity prices. Moody s lead analyst on Glencore, Elena Nadtotchi expects the trading house to improve its leverage profile in 2016, maintaining a strong liquidity and the ability to manage debt levels to match the lower earnings. Coal Newcastle Q coal pric- sustainable energy sources tures in Continental Europe es are now trading at such as hydro, nuclear, wind has put a damper on con- US$51.95/t up from and solar energy. sumption this year. US$51.45/t last week; spot prices are leveling around US$53/t, firming slightly from last week. The price outlook for next year remains negative as China is changing its energy mix towards more European physical thermal coal cargoes into ARA ended at US$49.30/mt this week, moving under the US$50 mark for the first time as higher than average tempera- On the back of the recent climate talks in Paris, IEA slashed its five-year coal demand growth forecast by 500 million tons. Grain s The US Federal Reserve s decision to rise the interest rate, putting pressure on the US$ is expected to make US grains less competitive internationally and weigh down on prices as a secondary effect. 3

4 4 -Shipbrokers and consultants since 1919-

5 Office Oslo Address Lorentzen & Stemoco AS Munkedamsveien 45, 0250 Oslo P.O. Box 2029 Vika, 0125 Oslo Norway Athens Lorentzen & Stemoco (Athens) Ltd Leof. Karamanli 25 Voula Athens, Greece Singapore Lorentzen & Stemoco Singapore Pte Ltd. 8 Eu Tong Sen Street, #21-98 Office 1 The Central Singapore Shanghai Lorentzen & Stemoco Shanghai Representative Office Room 2701, Shanghai Central Plaza 381 Huai Hai Zhong Road, Shanghai China New York Lorentzen & Stemoco AS (New York City) 8 East 41st St 8th Floor New York, NY United States of America +1(212) Disclaimer: The information contained within this report has been collected from a number of market sources and is given in good faith without guarantee, for information purposes only. Lorentzen & Stemoco and its affiliates, directors and employees are not liable or responsible for any consequences whatsoever occurring from errors or inaccuracy of the information contained within this report. 5