Weekly Dry Bulk Report

Transcription

1 33 -Shipbrokers and consultants since ly Dry Bulk Report 22 May 3th 214 Capesize: Rates returning to lower levels L&S INDEX OF DRY BULK STOCKS Index 214 Index 215 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. CAPESIZE Once the chartering arms of the Australian mining companies returned to their offices in Singapore after celebrating the Lion City s 5 th year of independence, the Capesize dry bulk carrier market simply collapsed returning to the previous dismal levels familiar to both shipowners and charterers. On Friday August 14 th 215, the Baltic Exchange reported that modern 18, dwt Capesize bulk carriers were earning less than US$ 14, per day on average, significantly down from the US$ 2, per day last Friday. The Capesize dry bulk carrier market has become more active during the summer, as the Chinese steel mills and traders have required more iron ore imports. Statistics by China Customs show that Chinese iron ore imports rose to 86.1 million tons in July, the highest number so far during the year and nearing the all-time-highs of , 6, 5, 4, 3, 2,,, million tons in January 214. The Australian mining companies Rio Tinto and BHP Billiton have been particularly busy in exporting more iron ore to the Chinese market, driving up freight rates sharply last week ahead of the Singaporean celebrations. However, this week the market has calmed down and freight rates have softened both in the Pacific and the Atlantic. Capesize Timecharter Average (TCA) On Wednesday night, two explosions in the northern Chinese city Tianjin had catastrophic effects. Reportedly, firefighters were spraying water on a warehouse storing chemicals, creating deadly explosive chemicals reactions. Tianjin is home to COSCO Bulk Carrier and is an important dry bulk import terminal, being built to accommodate the 4, dwt Valemax bulk carriers. According to China Customs, Tianjin took delivery of 25 million tons of iron during the first half of 215, about 5.5% of China s total iron ore imports. Bloomberg reports that both Rio Tinto and BHP Billiton have been affected, but the extent of the disruptions are not known. Iron ore forward prices were pushed up to US$ per ton in the fourth quarter, as attention in the commodity markets focused on disruptions to iron ore inventories in China. Some 7 million tons of iron ore are stocked in Tianjin, about 1% of countrywide inventories. Total inventories of iron ore in China have been reduced to 8 million tons, or about 2 days of supply. However, any disruptions to iron ore inventories in Tianjin will raise iron ore prices because of the importance of import terminal and iron ore inventory build-up. The relatively low stocks make the iron ore market more fragile to disruptions and could cause price to move up if inventories are deemed to be precariously low to steelmaking usage. 5 Yr High 5 Yr Low 5 Yr Avg 215 ytd FFAs as of today 1

2 Panamax: Active market in the Atlantic PANAMAX The market was surprisingly active considering we are in the middle of August, with the BPI TCA ending at US$8 389/day, up 2.5 per cent from the end of last week. Rates remained under pressure in the Pacific with a number of owners ballasting away rather than accepting the low levels on offer. The devaluation of the RMB has made an impact and caused delays on shipments, as goods become more expensive for Chinese buyers. A 74 dwt ship open in China was fixed at US$7 75/day for a trip via the US Gulf to the East. A Kamsarmax open in CJK was fixed at US$7 25/day via North East Australia to China. East Coast South America remained especially busy with rates edging higher. A dwt ship built 21 was rumoured fixed at US$9 25/day for a trip from East Coast South America to the East. US Gulf coal cargoes to the Continent were reported fixed around high US$12/mt Panamax Timecharter Average (TCA) 5 year High 5 year Low 5 year average 215 Ytd Supra/Handy: Rates softening in the Pacific SUPRA/HANDYMAX We experienced a quiet week for the Supra/Handymax market, much caused by the devaluation of the RMB. The BSI- TCA kept relatively steady from last week ending at US$9 422/day. In the Pacific, vessels open in Singapore taking coal from Indonesia to South China were seen fixing at US$6-625/day, down from US$6 75/day last week. Coal from Indonesia to East Coast India was fixing at around US$8 5-9 /day. A few short period fixtures with Persian Gulf delivery were reported at US$8-8 5/day. A vessel of approximately 53 dwt was booked for 3-5 months at around US$7 9/day, delivery Persian Gulf. In the Atlantic, a 5 dwt vessel was rumoured fixed from the Mediterranean via The Black Sea to China at around US$14 5/day. There were also rumours of a German charterer taking a Supramax ship from the East Mediterranean to the Far East at around US$16 /day. In East Coast South America, a Supramax vessel was taken for a trip to Singapore/Japan region at around US$12 /day plus a ballast bonus of US$25. Supramax Timecharter Average (TCA) 5 year High 5 year Low 5 year average 215 ytd 2

3 Iron Ore Iron ore: Prices remaining relatively steady Iron ore prices remained relatively steady despite an eventful week, ending at US$56.2/mt. The People s Bank of China engineered the biggest fall in the Renminbi in 2 years this week in an attempt to boost exports, and we saw the RMB lose about 3 per cent of its value against the US$. Chinese steel exporters have already cut prices in an attempt to become more competitive overseas, and smaller mines are said to have lowered their export prices on rebar steel (used for construction) by around US$5-1/ tonne. Weak domestic steel demand has encouraged Chinese steel makers to export more of their excess goods, and we have already seen a 28 per cent increase in exports during the first half of this year. If we continue to see high steel export numbers, this could prove to boost demand for iron ore. Transport of iron ore and other goods has also been halted after the massive explosion in a chemical warehouse located at the port of Tianjin this Wednesday. We may see an effect on iron ore prices, as steel mills normally have about 2 days of forward supply, and disruptions at the port could be felt as shortage. The port of Tianjin imported 25 million tons of iron ore during the first half of this year, about 6 per cent of China s projected imports for 215. Coal According to the Indonesian Mineral and Resources Ministry, coal exports fell 18 per cent from January to July, as a result of falling demand from overseas importers. Coal mined in Indonesia so far this year has reached 233 million tonnes, down 15per cent from same period last year. Indonesia is hardest hit by the 38 per cent fall in Chinese coal imports, as exports from Indonesia to China have been almost halved this year compared to the same period in 214. Grains Second Quarter Surveys released by the Federal Reserve banks this Thursday show that US farms face more pressure from lower grain prices this quarter. Farmers have been hit by especially large harvests of late, pushing down prices to a five year low, the strong dollar is also hurting exports. According to The US Department of Agriculture, overall farm income will drop by about 33 per cent this year to approximately US$74 billion, the lowest level seen since 29. 3

4 The Baltic Exchange Dry Index Last This Trend ly Baltic Average BCI- TCA () Softening ly Baltic Average BPI-TCA () Firming ly Baltic Average BSI-TCA () Softening ly Baltic Average BHI-TCA () Firming ly BDI Average () Softening FFA Last This Trend Calendar 16 BCI () Softening Calendar 16 BPI () Firming Calendar 16 BSI () Firming 5TC+Q1 (Cape) () Softening 5TC+Q2 (Cape) () Softening 5TC+Q3 (Cape) () Softening 5TC+Q4 (Cape) () Softening Bunker Prices Last This Trend Rotterdam IFO 38 (US$/mt) Softening Rotterdam MGO (US$/mt) Firming Singapore IFO 38 (US$/mt) Softening Singapore MGO (US$/mt) Softening 4

5 BCI FFA Cal 16 5 TC Cal 15 5 TC Cal 15 4 TC BCI-TCA ytd BPI FFA Cal 16 Cal BPI-TCA ytd BSI FFA Cal16 Cal BSI-TCA ytd BHI-TCA ytd 5

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