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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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Friday, 04 February 11
ADARO ENERGY FY10 COAL SALES UP 6 PERCENT TO 43.84 MILLION
As reported by insider stories, Indonesian coal miners PT Adaro Energy Tbk has produced 42.20 million tons of coal in 2010, a 4 percent increase com ...
Thursday, 03 February 11
MERCATOR LINES TO INVEST RS 200-250 CRORE ON COAL MINE IN INDONESIA - ECONOMIC TIMES
Economic Times reported that, Mercator Lines, the HK Mittal-controlled shipping-to-mines major, will invest about 200-250 crore (US$ 43.825 - 54.781 ...
Thursday, 03 February 11
DRY BULK MARKET LOOKS SET TO BOTTOM OUT NIKOS - ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market having lost more than 72% of its value in the last month or so and having retreated to a 2-year low, it seems that the bott ...
Wednesday, 02 February 11
INDONESIA MAY MISS COAL EXPORT TARGET IN 2011
COALspot.com - Indonesian Trade ministry has instructed independent surveyors temporarily not to issue pre-shipment survey report (LS) to the compan ...
Wednesday, 02 February 11
BAYAN TO SUPPLY COAL TO TP UTILITIES LTD
Insider Stories has reportd that, Indonesia's one of the leading coal miner PT Bayan Resources Tbk (BYAN) owned by businessman Dato' Low Tuck ...
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- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Planning Commission, India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
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