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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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- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- MS Steel International - UAE
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- The University of Queensland
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
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