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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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Thursday, 19 May 11
INDONESIAN COAL EXPORTS DROP 7.98 PERCENT IN APRIL
COALspot.com - Indonesian coal exports dropped to 2.168 million tons in April, and up 7.13 percent on the year and 7.98 percent below March, a ...
Thursday, 19 May 11
OVERSUPPLY, VERY LARGE ORE CARRIERS EAT UP ON DRY BULK FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a brief upward momentum which ended early last week, the Baltic Dry Index, the dry bulk market’s benchmark has returned to its usual pat ...
Wednesday, 18 May 11
THE US COAL INDUSTRY LOGGED EXPORTS OF AROUND 25M TONNES IN 1Q OF 2011 - BRS
Another slow decline in the bulk markets this week, with the BCI losing the most at nearly 5%, the BPI 2.8% and the smaller sizes sub-1% amounts. Th ...
Wednesday, 18 May 11
AKR AIMS TO SELL COAL WORTH RP216 BILLION - PAPER
Bisnis Indonesia, an Indonesia's one of the leading business paper reported that, PT AKR Corporindo Tbk has targeted coal sales valued at Rp216 bil ...
Wednesday, 18 May 11
OVERHAUL OF MINING LAW MAY DETER INVESTMENT, S&P SAYS - THE JAKARTA GLOBE
The Jakarta Globe, an Indonesian English language news paper reported that, A report by Standard & Poor’s Ratings Services that a regulatory ...
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- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Australian Coal Association
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Deloitte Consulting - India
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
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