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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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Tuesday, 17 May 11
DRY BULK MARKET ENTERS WEEK ON WEAK MODE - HELLENIC SHIPPING
In yet another sign of softening freight rates for dry bulk carriers and oversupply issues, the dry bulk market entered this week on a downward path ...
Monday, 16 May 11
INDO TAMBANG 1Q SALES REVENUE UP - INSIDER STORIES
Thai Banpu Plc last week reported a 7.83% increase in coal sales revenue from its Indonesian operating unit via PT Indo Tambangraya Megah Tbk (ITMG) ...
Sunday, 15 May 11
THE FREIGHT MARKET REMAINED SOFT - VISTAAR
COALspot.com - "The freight market overall remained soft", said Capt. Reddy, Director of Vistaar Shipping Singapore. He further added, &qu ...
Saturday, 14 May 11
WELSPUN TO ACQUIRE AN INDONESIAN COAL MINE - MEDIA
The India based Welspun Power and Steel Ltd is planning to acquire 456,000 shares in PT Batubara Energy Indonesia, representing 75% interest, accord ...
Saturday, 14 May 11
DRY BULK MARKET ON A DOWNFALL ONCE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what is now pretty clear will be yet another challenging year for dry bulk ship owners, the Baltic Dry Index returned to its usual pattern of dec ...
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- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- White Energy Company Limited
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
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