12 -Shipbrokers and consultants since 1919- ly Dry Bulk Report 22 May 3th 214 HIGHLIGHTS Capesize: Relatively flat in the Pacific Front haul, reasonably quiet Panamax: Firming rates for tonnage fixing grain from ECSA/ Far East L&S INDEX OF DRY BULK STOCKS* 15 85 65 45 25 Index 214 Index 215 CAPESIZE In the Pacific, reports indicate trips fixed at US$4.3/mt at the start of the week, a step backwards from the end of last week. Elsewhere in the Pacific there were still cargoes from Queensland ports to China, rates from Gladstone- Abbot Point to Qingdao were still around US$4.8/mt. The Pacific continued tracking relatively flat throughout the week, aside from some fluctuations in rates due to bunker changes. RTS took 3 vessels this Wednesday for C5, rates in the line with the market US$4.4-4.5. Same is true for East Coast Australia, PANAMAX Rates firmed for tonnage fixing grain from East Coast South America to Far East. A vessel of 74 dwt built 2 was reportedly fixed at US$12 / day plus a ballast bonus of US$2. Eco Kamasarmax ships were seeing rates approaching US$13 /day with around US$3 in ballast bonus. With some congestion building up (one vessel was expecting to wait at Paranagua for more than one month), some charterers switched their attention to fixing basis South East Asia/Indian Ocean area 7.. 5. 4. 3. 2.. Newcastle/Zhoushan fixed US$6.1/mt for mid-april dates and Gladstone/Liuheng fixed US$4.8/mt for 1/1 April. The market firmed on Thursday with majors active taking ships for C5 at US$4.7/mt There are still cargoes in the market, but now out to 5 th April onwards, charterers feel they have a bit of a time buffer and are again bidding US$4.4/mt. Idle tonnage around South Africa means the Saldanha Bay/ Qingdao route is under a bit of pressure, Anglo claims to have tonnage offering US$7.5/mt for an 8/1 April window and aims to fix around US$7/mt. Front haul has been reasonable quiet; we expect things to be more active next week as April dates get closer. Capesize Timecharter Average (TCA). 5 Yr High 5 Yr Low 5 Yr Avg 215 ytd FFAs as of today and one ship was rumored fixing from Colombo via East Coast South America to the Far East at US$7 /day. From the Continent, a Kamsarmax built 213 was rumored to have fixed at US$9 4/day for a grain trip to the Far East. The volume of cargoes in the Pacific increased but such did the supply of tonnage, and rates showed only small gains. A vessel of 75 dwt built 2 was taken from North China via North Pacific US Coast to China at US$5 /day. An eco-type 77 8 dwt vessel built 214 secured US$7 25/day from Vietnam via Indonesia to East Coast India. There was some short period activity, including a vessel of 75 dwt built 26 from south China at US$7 25/day. *Basket of stocks for L&S Index includes: Golden Ocean Group Ltd., Western Bulk ASA, Scorpio Bulkers Inc., Paragon Shipping Inc., Baltic Trading Ltd., Diana Shipping Inc., DryShips Inc., Safe Bulkers Inc., and Star Bulk Carriers Corp. 1
Supramax/Handy: More activity in both basins, rates slightly up SUPRAMAX/HANDY We have seen a lot more activity in both the Pacific and Atlantic markets, however rates were only up slightly on last week s. Indonesia/ India coal runs were done at U$7-8 /day basis Singapore for full India range. Although we saw limited North Pacific cargoes, rates seemed to be shifting to DOP rates over the APS we were seeing last week. Tonnage open in China was starting to thin a little. Nickel ore is becoming more active with ships being done at about US$7/day basis Singapore via Philippines to China. There was talk of some short period being done in the Far East at around US$8 /day but again owners are not much willing to fix at these levels and prefer to play spot instead. Handysize tonnage in South East Asia was firmer this week with reports of Handy vessels fixing in around US$/ day. In the Atlantic basin very little has changed over the previous week. US Gulf front haul routes remained in the low US$1 / day. Scrap runs on the continent also saw very little change on the previous week. The Black Sea market was also weak, with trips to Persian Gulf Far East range being done in the US$7-8 / day levels. East Coast South America saw a slight upturn with slightly higher rates basis APS with ballast bonus. The Baltic Exchange Dry Index Last This Trend ly Baltic Average BCI- TCA () 3264 2728 Softening ly Baltic Average BPI-TCA () 4712 481 Firming ly Baltic Average BSI-TCA () 6154 6475 Firming ly Baltic Average BHI-TCA () 5253 5523 Firming ly BDI Average () 565 572 Firming FFA Last This Trend Calendar 16 BCI () 11553 1167 Firming Calendar 16 BPI () 7952 8331 Firming Calendar 16 BSI () 864 7861 Softening 5TC+Q1 (Cape) () 719 786 Softening 5TC+Q2 (Cape) () 8994 911 Firming 5TC+Q3 (Cape) () 12687 12756 Firming 5TC+Q4 (Cape) () 8497 8563 Firming Bunker Prices Last This Trend Rotterdam IFO 38 (US$/mt) 32 281 Softening Rotterdam MGO (US$/mt) 549 51 Softening Singapore IFO 38 (US$/mt) 325 38 Softening Singapore MGO (US$/mt) 564 529 Softening 2
Iron Ore Iron Ore: Continuing sliding iron ore price forecast Fortescue Metals Group had to pull their refinance offer of more than US$2 billion in debt maturing over the next four years. Investors wanted 9 per cent, compared to the existing coupons ranging from 6-8.25 per cent. This is a sign of deepening distress in the iron ore market. Chief financial officer of Fortescue, Stephen Pearce is claiming that their position on the iron ore cost curve is bulletproof and the cost of production has not been an issue in recent discussions with debt investors. Despite declining prices, Fortescue s delivered price to China is about US$41/mt. The company's share price fell 7 per cent to an eight year low this Wednesday, before closing down 5.3 per cent at US$1.87 on the stock exchange As a result of decelerating Chinese economic growth and lacking demand for iron ore, price forecasts continue to slide. The iron ore September contract on the Dalian commodity exchange fell 2.6 per cent to 443 yuan/mt, the weakest since September 17. According to the Department of Industry and Science, rates will average about US$6/mt this year, compared with a price forecast at US$63/mt in December last year. Prices are forecasted to bottom at US$53/mt in 3Q15, and rebound in 216 to US$62/mt according to Citi Bank. Coal Coal: Mining companies dealing with increasing debt and shrinking market A wave of bankruptcies is about to hit the coal industry according to Macquarie Research. Coal mining companies are dealing with increasing debt and a shrinking market. China, the world s biggest consumer burned 2.9 per cent less coal in 214 than the year before and we saw a 22 per cent decline in imports of coal at the end of 214, both results of China s measures to guard its domestic coal industry. Production in the US is at its lowest level since 1993, and has to compete with cheap shale gas. Coal production in the US is forecasted to decline further, and according to Macquarie this is worrying for the entire industry. Grains Other Bulks US soybean, wheat and corn futures rose this Wednesday as the Federal Reserve announced they will be less patient in normalizing monetary policy. The Federal Reserve s announcement made the dollar depreciate sharply, which is a bullish factor for U.S commodities export. In the past week, a number of cunsumers have put the CIF China buyers ceiling at US$35/mt. This has however been to low to attract any sellers. According to traders and produces, buyers have to pay up to get tonnage. 3
2 2 24 22 2 1 1 15 13 11 9 7 BCI FFA Cal 16 5 TC Cal 15 5 TC Cal 15 4 TC BPI FFA Cal 16 Cal 15 45 4 35 3 25 2 15 5 1 1 4 2 BCI-TCA 213 214 215 ytd BPI-TCA 213 214 215 ytd BSI FFA 15 13 11 9 7 Cal16 Cal 15 1 1 4 2 BSI-TCA 213 214 215 ytd BHI-TCA 4 2 213 214 215 ytd 4
Office Oslo Address Lorentzen & Stemoco AS Munkedamsveien 45, 25 Oslo P.O. Box 229 Vika, 125 Oslo Norway +47 2252 77 Athens Lorentzen & Stemoco (Athens) Ltd Leof. Karamanli 25 Voula 166 73 Athens, Greece +3 21 89 59 Singapore Lorentzen & Stemoco Singapore Pte Ltd. 8 Eu Tong Sen Street, #21-98 Office 1 The Central 59818 Singapore +65 6349 84 Shanghai Lorentzen & Stemoco Shanghai Representative Office Room 271, Shanghai Central Plaza 381 Huai Hai Zhong Road, 22 Shanghai China +86 21 6391 588 New York Lorentzen & Stemoco AS (New York City) 8 East 41st St 8th Floor New York, NY 117 United States of America +1(212) 684 253 5