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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, 20 March 11
FREIGHT MARKETS COULD SOFTEN NEXT WEEK DUE TO JAPANESE PORTS CLOSURE AND LIBYAN CRISIS - VISTAAR
COALspot.com - The BDI was down by 1.98 pct (closing at 1531 points) mainly due to Cape index which was down by almost 11 pct and closed 1687 points ...
Friday, 18 March 11
FALL IN INDONESIAN COAL EXPORTS IN FEBRUARY 11
COALspot.com - Indonesian coal exports seen a fall of 10.76% during Feb 2011. The world’s largest coal exporter shipped 22.029 MMts of c ...
Thursday, 17 March 11
THE PACIFIC HANDY MARKET IS CURRENTLY STEADY - FEARNBULK
Handy
The Atlantic market is showing signs of recovery and does not seem to be affected by the Japan disaster. The market is very positional and i ...
Tuesday, 15 March 11
COAL PRODUCTION FORECAST TO SURGE ON RISING PRICES - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal production is forecast to increase by 20 percent this year as coal prices continue to ...
Monday, 14 March 11
IRON ORE TRADING WORLD EUROPE 2011
Press Release - Strategy and opportunity for miners, steelmakers, end users and the financial community.
The iron ore spot market is growing at a ...
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- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- PTC India Limited - India
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
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