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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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Friday, 01 April 11
DRY BULK MARKET WEAKENS ON SLOWER DEMAND, HOPES FOR MID-TERM REBOUND ON JAPANS RECONSTRUCTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, as reflected in the Baltic Dry Index (BDI) retreated for a third day yesterday, after staying flat on Monday, to end at 1,530 p ...
Wednesday, 30 March 11
CHALLENGER SIGNS OPTION AGREEMENTS TO PURCHASE FOUR COAL PROJECTS IN INDONESIA
Challenger Signs Three Exclusive Option Agreements to Purchase Four Coal Projects in East Kalimantan, Indonesia
Challenger Deep Resources Corp.ha ...
Wednesday, 30 March 11
KPCL TO IMPORT ONE MILLION TONS OF 6300 GAD COAL
COALspot.com - Karnataka Power Corporation a state utility of Karnataka, India called for open tender for supply of one million tons of 6300 Kcal/kg ...
Wednesday, 30 March 11
WIKA GRABS PROJECT FROM ADARO INDONESIA - INSIDER STORIES
One of Indonesia's largest thermal coal PT Adaro Indonesia has finally mandated PT Wijaya Karya Tbk (WIKA) as a contractor to install and manage ov ...
Tuesday, 29 March 11
JAPAN FACTOR RIPPLING THROUGH THE SHIPPING MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the world watching the latest developments regarding the nuclear crisis in Japan and the devastating effects of the recent tragedy that struck ...
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- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Australian Coal Association
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Commonwealth Bank - Australia
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