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Wednesday, 13 April 11
CAPESIZE VESSELS ARE DELIVERED AT A PACE OF ONE NEW VESSEL EVERY SECOND DAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 In a clear sign that it will take a significant rise in global seaborne dry bulk trade in order to be able to absorb the flurry of new building tonnage thrown into the water, BIMCO has issued a new report, saying, among others, that at the moment Capesize vessels are delivered at a rate of one new vessel every second day. On top of that, 6 VLOC’s have been launched with another 35 potentially up for delivery in 2011 (adjusted for slippage). The report also said that the active fleet has grown by 2.7% so far in 2011, caused by deliveries of 222 newbuilt vessels with an average cargo capacity of 85,000 DWT offset by 67 vessels with a total capacity of 4.8 million DWT being demolished.
On the positive side, “like in the tanker segments, demolition finally, but still surprisingly, has kicked off strongly – positively impacted by the high scrap steel prices. A 25 year-old large Capesize demolition was worth almost USD 11 million. However, the level of demolishing is still considerably below a level that could balance supply and demand and impact the freight markets positively” said the report by BIMCO’s shipping analyst, Peter Sand. “BIMCO forecasts inflow of new dry bulk tonnage in 2011 to be a bit higher than in 2010 at 86 million DWT. As demolitions are expected to reach 12 million DWT, the fleet is forecast to grow by 13.8% in 2011. Newbuilding contracts are being signed at the slowest pace since Q2 in 2009. This is a very positive development, especially seen in the light of the unbelievable high contracting level in 2010 with 78 million DWT of new contracts” said the report.
In terms of the dry bulk market’s outlook, BIMCO said that “the events in Japan, will, in the short term, be a negative story for the dry bulk market as expected high volumes into Japan will be some 10-20 million tons lower, as coal power plants and steel mills have be shut down for a while and some are expected to be so for up to 1 year. In the medium to long term, dry bulk is likely to benefit as reconstruction takes off. Iron ore, coking coal, thermal coal and wood for construction are likely to be in higher demand following the disasters. Unlike Australia, which was a supply story, Japan is mainly about demand falling short – the impact on the freight market has been insignificant as compared to the flooding in Queensland.
BIMCO assesses that Capesize freight rates will remain in depressed territory in the coming months. Capesize Time Charter Average is likely to hover around USD 10,000–15,000 per day and backhaul trip charter earnings likely to continue to make negative returns.
The Capesize fleet has already grown 4.5% this year and overcapacity in the segment will stay a drag on freight rates each time they try to escape the doldrums. Supramax and Panamax are likely to stay firm in the USD 15,000–USD 20,000 per day interval as demand supports this level. Overall, dry bulk commodity demand growth is expected to be around 7-8% in 2011, with iron ore and coal as usual in the driving seat. This outlook provides a solid demand picture to comfort and fence a collapse of earnings, as oversupply is haunting all segments” said the report.
For the time being though, since early January, Capesize time charter rates have been below all the other segments including Handysize. While the 3 smaller segments have rebounded since then, Capesize is still down. “Current average of 4 time-charter routes is USD 10,371 per day. For comparison – a Handysize makes USD 11,849 per day, a Supramax USD 15,921 per day and a Panamax USD 15,807 per day. Spot rates on main Capesize iron ore trades from Brazil and Australia, which are the top two suppliers to the Chinese steel industry, look as if they have bottomed out during January and February. This year’s unfolding story in relation to iron ore trades will be the scheduled delivery of the first 6 out of 19 400,000 DWT VLOC’s to the Brazilian miner, Vale. This is expected to impact the market, as Vale is a large charterer of Capesize tonnage to service its Asian customers. In 2010, Vale exported 131 million tons to China. Estimating 6 round voyage a year, the 6 new build VLOC’s will be able to carry 14.4 million tonnes of iron ore p.a., equal to 11% of Vale exports to China. With another 13 to be delivered over the next 2-3 years, Vale will depend much less on the Capesize chartering market – as it will be self-sufficient in 25-30% of its tonnage demand. The vessels are intended to bring down Vale’s price disadvantage to the Australian iron ore by taking out the longhaul maritime transportation cost element. The spot rates are on average 2½ times higher on Brazilian ore, being a close mirror of the difference in distance.
It remains uncertain where Vale is going to establish its Asian iron ore distribution centre. First Qingdao was targeted, but failed to become a done deal. Lately Vale has focused on a Malaysian distribution hub, but another site remains an option, the Tianjin Dongjiang Free Trade Port Zone near Beijing – a new giant port and logistics centre. The final location will be vital to the success of VLOC’s.
Seaborne Iron ore demand is expected to grow by 7% overall, where China will take the most and European demand will increase to a precrisis level.
Also recently, the commodities trader Cargill has decided to become a ship owner once again, this time round mainly with the purpose of being an asset player. This adds to the number of large charterers making an entry into ship owning primarily with the object of controlling a larger part of the supply chain and converting variable costs to fixed costs.
The demand for taking Capesize vessels on time charter is on a par with last year. Time charter rates are currently higher than spot freight rates, which indicates an extraordinarily weak spot market. Representative deals that support the rather flat medium term expectation in the market are, amongst others, Cargill taking the “Semirio”, 174,000 DWT for two years at USD 17,000 per day and Rio Tinto taking “Bulk India”, 177,000 DWT for one year at USD 16,500 per day”, concluded BIMCO’s analysis
Source: Nikos Roussanoglou, Hellenic Shipping
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Wednesday, 25 May 11
DRY BULK MARKET ENTERS WEEK ON A HIGH NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has managed to end its downward trend of the past few weeks and surge back on higher ground. Yesterday, the Baltic Dry Index (BD ...
Monday, 23 May 11
BRMS IS TO START PRODUCTION FROM DAIRI PRIMA MINERALS
COALspot.com - The Presidential Decree No. 28 Year 2011 that allows conditional underground mining in the protected forest areas was issued on 19th ...
Sunday, 22 May 11
INDONESIA - INDIA IS LIKELY TO BE STEADY NEXT WEEK - VISTAAR SINGAPORE
COALspot.com - The freight market remained soft beginning of the week, however second half of the week was firm with BDI up by 3.29 pct and closed a ...
Saturday, 21 May 11
OWNERS PREFER TO DO INDO COAL OR NICKEL ORE TO CHINA RATHER THAN GOING TO INDIA - FEARNBULK
Handy
The Atlantic is marked by volatility and very positional, nevertheless USG,NCSA, Cont remain strong thanks to the petcoke, grains and scrap ...
Friday, 20 May 11
GOVT TOLD TO LIMIT COAL, GAS EXPORTS - THE JAKARTA POST
The Jakarta Post, a leading news paper in Indonesia, reported that, Amid soaring global oil prices, the government should limit exports of coal and ...
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- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Australian Coal Association
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- White Energy Company Limited
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
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