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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, 28 January 11
MPM SEEKS 40K TONS OF INDONESIAN COAL
An Indian paper producer Mysore Paper Mills Ltd., based in Bangalore is looking for 40,000 metric tons of non-coking coal of Indonesian o ...
Friday, 28 January 11
TRADING PERMIT DELAYS THREATEN EXPORTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, an ongoing wrangle over licenses for mining traders could hurt investment, a coal mining association chief said on ...
Friday, 28 January 11
DRY BULK MARKET CLOSING IN TOWARDS CRISIS LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The trials and tribulations of the dry bulk market seem to have no end during the first month of 2011, as the industry’s benchmark, the Baltic ...
Wednesday, 26 January 11
ADANI TO SET-UP RAIL, PORT AND POWER PROJECTS IN INDONESIA - MONEYCONTROL
Moneycontrol reported that, Adani Enterprises, the flagship company of India’s infrastructure conglomerate the Adani Group, today announced th ...
Wednesday, 26 January 11
DRY BULK MARKET TAKES YET ANOTHER NOSEDIVE, CAPESIZES LOOK RATHER UNATTRACTIVE AT THE MOMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The downturn of the dry bulk market sees no boundariers, disproving even those who thought that at least for the capesize market, the worst had pass ...
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- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- The University of Queensland
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
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- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Australian Coal Association
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- PTC India Limited - India
- Ministry of Mines - Canada
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- MS Steel International - UAE
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- India Bulls Power Limited - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
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