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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, 10 April 11
SOFT FREIGHT MARKET TREND LIKELY TO BE CONTINUED - VISTAAR SHIPPING
COALspot.com - The freight market continued to soften further with the BDI breaking the 1,500 points and closing at 1376 points down by almost 10 pc ...
Thursday, 07 April 11
HANDY RATES SLIDING NOW - FEARNBULK
Handy
Slowly softening rates as more tonnage is accumulating in the Atlantic basin.The trans-Atlantic round is around $15k pd with trips to ...
Thursday, 07 April 11
DRY BULK MARKET PLUNGING EVEN FURTHER ON LOW CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has continued its falling pattern this week, with every day proving to be painful for ship owners, especially those of the large ...
Thursday, 07 April 11
INDIKA BUYS MITRABAHTERA AT US$ 0.183
PT Indika Energy Tbk (INDY), integrated energy company, today has exercised an option agreement to acquire 51% shareholding in newly listed coal tug ...
Wednesday, 06 April 11
FORBES & MANHATTAN COAL ANNOUNCES SIGNIFICANT OFF TAKE AGREEMENT
Steady Cash Flow Will Fund Production Ramp Up
Forbes & Manhattan Coal Corp., ("Forbes Coal" or the "Company") is a produc ...
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- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
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- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- White Energy Company Limited
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
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