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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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Thursday, 24 February 11
SUPRAS ARE FIXED AT CLOSE TO 10K FOR TRIPS VIA INDONESIA TO INDIA WITH COAL - FEARNBULK
Handy
After a short lived surge in rates the Atlantic market has flattened out due to too many spot vessels. The USGulf has cooled down somewhat f ...
Wednesday, 23 February 11
LIMITED AVAILABILITY OF COAL COULD TRIP MEGA POWER PLANT - THE ECONOMIC TIMES
The Economic Times, an Indian leading news paper reported that, an acute shortage of domestic coal is threatening to destabilize new power generatio ...
Wednesday, 23 February 11
DRY BULK MARKET BACK ON RETREAT MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The two week rise of dry bulk freight rates seems to have come to a halt this week, with the industry’s benchmark, the Baltic Dry Index (BDI) lo ...
Wednesday, 23 February 11
INDONESIA NEEDS TO REVISE EXPORT BAN ON 5600 GAD COAL EXPORT - INDUSTRY
COALspot.com - The Indonesian government may be forced to revise its 2014 timeline for the proposed ban on all low quality coal exports, Patrick Han ...
Tuesday, 22 February 11
SUPRAMAX MARKET IS IMPROVING IN THE PACIFIC
BRS - A 10% rise in the BDI this week, mostly on the back of Panamax rates and improvements in the Supramax market in the Pacific. For the Capes, ra ...
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- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Parliament of New Zealand
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
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