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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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Sunday, 17 April 11
THE FREIGHT MARKET APPEARS WILL CONTINUE TO BE SOFT NEXT WEEK - CAPT. REDDY
COALspot.com - "The freight market continued to soften further with all segments down except for the handy size which was marginally up by 10 p ...
Sunday, 17 April 11
ADARO TO PROPOSE US$75 MILLION DIVIDEND
COALspot.com - One of Indonesia's largest coal miner PT Adaro Energy Tbk (ADRO) is keen to propose a final dividend of US$75 million or Rp 20.17 (U ...
Saturday, 16 April 11
TNPL RECEIVES 1.6MT OF COAL OFFERS - SOURCES
COALspot.com - Tamil Nadu Newsprint and Papers Ltd. has closed its 160,000 MT coal inquiry today.
More than a half a dozen of Indian coal t ...
Friday, 15 April 11
DRY BULK MARKET KEEPS ON FALLING, ON LOW DEMAND AND HIGH SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its falling patern this week, with the industry’s benchmark, the Baltic Dry Index (BDI) retreating again yesterda ...
Thursday, 14 April 11
SUPRAS IN N.CHINA GET CLOSE TO $12000 FOR TRIPS VIA INDONESIA TO INDIA - FEARNBULK
Handy
The Atlantic market remains flat - very little new/fresh business and slow activity. Considerable prompt tonnage remains unfixed. The USG pa ...
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- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- The University of Queensland
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- London Commodity Brokers - England
- VISA Power Limited - India
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
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