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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, 05 May 11
PANAMAXES LEAD DRY BULK MARKET TO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s benchmark, the Baltic Dry Index (BDI) managed to edge higher yesterday, rising by 1.81% to 1,292 points, in the first po ...
Thursday, 05 May 11
AKR NAMES KARUNIA AS COAL CONTRACTOR
Insider Stories reported that, PT AKR Corporindo Tbk has appointed PT Karunia Bumi Khatulistiwa as the contractor of coal mining concession in North ...
Tuesday, 03 May 11
DRY BULK MARKET OUTLOOK SEEN WEAK, AS SHIP OWNERS PILE UP MORE SHIPS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the Baltic Dry Index not trading yesterday, it’s worth taking a step back to see the current freight levels. First of all, capesizes and ...
Tuesday, 03 May 11
THE HANDY MARKET CONTINUED TO SLIDE DOWN - BRS
There were marginal increases in rates for the larger sizes this week, with the Cape index remaining stable and the Panamax index logging a 5% incre ...
Monday, 02 May 11
ADARO POSTS 11.7 PERCENT INCREASE IN REVENUES ON HIGHER PRICES - THE JAKARTA POST
The Jakarta Post reported that, Indonesia’s second-largest coal producer, PT Adaro Energy Tbk, announced an 11.7 percent increase in net reven ...
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- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Minerals Council of Australia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
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