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