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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, 28 April 11
BALTIC DRY INDEX NUDGES UP AFTER DAYS OF LOSSES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After consecutive falls, the dry bulk freight market, as followed through the Baltic Dry Index, finally caught a breather yesterday, with the BDI ma ...
Wednesday, 27 April 11
KEWESPO CALLS FOR 765KT OF THERMAL COAL
COALspot.com - South Korea's East-West Power Co's (KEWESPO) has issued a tender to buy total 765,000 tonnes of thermal coal for delivery between J ...
Wednesday, 27 April 11
HARUM ENERGY TO PAY RP 659.1B IN DIVIDENDS - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miner Harum Energy is planning to pay out Rp 659.1 billion (US$76.46 million) in dividends this year ...
Wednesday, 27 April 11
TSIS $5 MILLION PLANT TO START PRODUCING UPGRADED COAL - THE JAKARTA POST
The Jakartapost reported that, PT Total Sinergy International (TSI), in association with Agritrade Resources Limited of Hong Kong, will upgrade its ...
Wednesday, 27 April 11
RAIN CONSIDERS COAL MINES TAKEOVER - INSIDER STORIES
Indonesian's tenth largest coal miner in term of coal concession, PT Resource Alam Indonesia Tbk (KKGI), is considering to acquire several coalmine ...
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- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- White Energy Company Limited
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
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