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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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Tuesday, 29 March 11
DUTY EXEMPTION UNLIKELY TO IMPACT COKING COAL PRICES - PTI NEWS
Press Trust of India News reported that, the exemption to certain types of coking coal from customs duty is not likely to impact steel prices at pre ...
Monday, 28 March 11
HARUM ENERGY FY10 EARNING UP 7.23% - INSIDER STORIES
Thermal coal producer PT Harum Energy Tbk (HRUM), controlled by Indonesian businessman Kiki Barki through his son Lawrence Barki, posted a slight in ...
Monday, 28 March 11
IBT RAISES CAPACITY OF PULAU LAUT TERMINAL - THE JAKARTA POST
The Jakarta Post reported that, coal infrastructure and logistics firm PT Indonesia Bulk Terminal (IBT), a subsidiary of PT Adaro Energy Tbk, plans ...
Saturday, 26 March 11
THE FREIGHT MARKET REMAINED A BIT VOLATILE THIS WEEK - CAPT. REDDY
COALspot.com - "The freight market remained a bit volatile this week", says Capt. Reddy, director of Vistaar Shipping Singapore.
Howeve ...
Saturday, 26 March 11
FLSMIDTH WINS MULTIMILLION DOLLAR MATERIAL HANDLING PROJECT IN INDONESIA
FLSmidth has signed a contract in Jakarta worth in excess of USD 135m (DKK 700m) with PT Adaro Indonesia, a subsidiary of PT Adaro Energy Tbk., to s ...
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- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Bhatia International Limited - India
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- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
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- Eastern Energy - Thailand
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- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- VISA Power Limited - India
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
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- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
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- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
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- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
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- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
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- Ministry of Transport, Egypt
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- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
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- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
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- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Planning Commission, India
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- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
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- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
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- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
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- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
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- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
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