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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, 08 February 11
BAYAN, KANGAROO EXTEND DUE DILIGENCE
Coal miner controlled by businessman Dato' Low Tuck Kwong PT Bayan Resources Tbk (BYAN) and Australia-listed coal company Kangaroo Resources Limite ...
Tuesday, 08 February 11
DRY BULK: IS THE TIDE TURNING? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what could be perceived as a change of market sentiment for the better, the dry bulk industry’s benchmark, the Baltic Dry Index (BDI) poste ...
Monday, 07 February 11
THE INDONESIAN COAL REFERENCE PRICE HAS JUMPED 13.03 PERCENT IN FEBRUARY 2011
COALspot.com - Indonesia’s Ministry of Energy and Mineral Resources has set the February 2011 Indonesian Coal Reference Price for therma ...
Monday, 07 February 11
COAL PRICES ON RISE: DEMAND FROM INDIA AND CHINA - ANALYZED SUNIL K KUMBHAT
INDONESIA IS HEART OF ASIAN COAL BOOM
COALspot.com - Rising demand of Coal from India and China, coupled with global financial recovery, is driv ...
Monday, 07 February 11
RICHARDS BAY COAL TERMINAL EXPORTS SURGE, BUOYED BY ECONOMIC DEVELOPMENT IN CHINA AND INDIA
COALspot.com - Richards Bay Coal Terminal (RBCT) announced today that 2010 exports have exceeded the last two years’ performance, said in a re ...
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- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
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