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Friday, 15 July 11
DRY BULK MARKET SUFFERS NEW BLOW, RETREATS EVEN FURTHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 The dry bulk market fell even lower yesterday on the back of lower demand for larger vessels, like Capesizes and Panamaxes. The industry’s benchmark, the Baltic Dry Index (BDI) was down by 16 points to 1,367, with the Baltic Capesize Index (BCI) down even further to 1,943 points, while Panamaxes were also among the main “losers” with the Baltic Panamax Index (BPI) falling to 1,606 points as well. By contrast, the smaller vessel types were unchanged yesterday.
In light of this weak demand, it’s useful to take a look on the latest dry bulk demand estimated from BIMCO. According to the analysis, “the healthy demand picture of some 6% demand growth is what keeps the dry bulkers afloat. Despite the multiple disruptions that have already taken place, we see growing demand for almost all commodities. This has certainly prevented a meltdown of freight rates. Many people expected the current doldrums already last year, but extremely strong demand growth in 2010 postponed the hardship into 2011. While Capesize vessels are having the worst time of their lives, Supramaxes have kept up quite well recently – particularly in the Atlantic, where rates have moved more sideways than down. But the overall direction is in tune with all the other dry bulk vessel sizes – and that’s “southbound”. Even the smallest vessel type, Handysize, has not completely withstood the overall downward pressure, as rates in that segment are down 45% in May y-o-y. But if you look closer at 2011 alone, Handysize rates have been very stable in the USD 10,000-12,000 per day interval.
Like the tanker business has already done for some time now, the dry bulk business is settling in for an endurance race, as profitability hits new lows. Queensland, Australia, is getting closer to normal throughput following the severe flooding in January that hampered especially coal exports but also weakened the prospects of an otherwise strong high quality wheat harvest and subsequently strong export volumes. As Australian coking coal exports have been limited due to the extensive floods, the shortage has been spilling over into rising regional coal prices. That has benefitted the US, South African and Columbian exports, which in combination with falling freight costs, has made long distance coal transports competitive.
Extraordinary post-quake demand from Japan remains to be seen and the lack of dry bulk commodity demand from Japan is expected to stay around for another few months. As an exception the steel industry has managed to prevent a massive drop in output and thus also kept raw material imports steady. Official Japanese estimates point at a less than 3% drop in steel production in Q2 as compared to same period last year. Thus Japanese iron ore and coking coal demand have not been great movers in the market and are not really expected to become so throughout the remainder of 2011. What happens in the medium term depends largely on when rebuilding of the nation kicks off big time. Overall Japanese industrial production fell by 14.0% y-o-y in March, this is a significant drop bearing in mind that 1/3 of the month was normal.
Regardless of the slightly softer overall demand picture that is playing out when comparing it to the forecast at the start of the year, demand for most commodities is solid. Iron ore is set to be the best performer of the major bulk commodities at 1,040 million tons (+6% y-o-y) and amongst the minor bulks, cement stand out positively as it claws its way back from the 2009-abyss. The level is still some 15 million tons shy of the 2006-peak, but the cement trade is on course for 91 million tons, which will then be the highest demand on record when you exclude the extraordinary years 2005-2008” said BIMCO’s shipping analyst Peter Sand.
Another interesting insight can be given through the latest trends regarding demolition activity. According to the latest weekly report from Piraeus-based shipbroker, Golden Destiny, “in the demolition market, there has been a subdued sentiment with India offering weaker scrap rates and Bangladesh situation still being vague. Pakistan is trying to bid some tonnage, while China has stepped behind offering the lowest levels. In the bulk carrier segment, capesizes are still on the spotlight with about 47 units reported to have been sent to the scrap yards within the year.
There is a feeling that this trend will continue till the end of the year as capesize time charter equivalent earnings have not yet fully recovered, even though are floating above $10,000/day.
The recent softness in scrap prices has caused some worries about the trend in the coming weeks and some of the buyers and sellers wait and watch before committing to new deals. Rumors that the expected market closure in Bangladesh may not be forced on the beginning of July, leaves hopes for a future spike in rates. Bangladesh is now offering $495/ldt for dry/general cargo and $520/ldt for wet cargo, while in India scrap levels have fallen by $30-$40/ldt from May. It is worth mentioning the intensive scrapping trend in the reefer segment during the last month in the scrap yards of India.
The week ended at a slow pace of demolition activity but at higher levels from previous week with 11 vessels reported to have been headed to the scrap yards of total deadweight 850,332 tons. Bulk carriers have grasped the lion share, 55% of this week’s volume of business with 67% of the scrapping business being centred on large size units, capesizes and VLOC. In terms of the reported number of transactions, the demolition activity has been marked with a 22% week-on-week increase and in terms of the total deadweight sent for scrap there has been a 71% increase. In terms of scrap rates, the highest scrap rate has been achieved this week for M/V “Berge Pacific” 231,851dwt of 33,679 ldt at $505/ldt with buyers option India – Pakistan-Bangladeh. At similar week in 2010, demolition activity in terms of the reported number of transactions was down by 81% than the current levels, when 2 vessels had been reported for scrap of total deadweight 204 mil tons with India offering the highest levels $375/ldt for dry and $400/ldt for wet cargo” concluded Golden Destiny.
Source: Nikos Roussanoglou, Hellenic Shipping
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Tuesday, 12 July 11
DRY BULK MARKET BEGINS WEEK ON RETREAT MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was evident by the end of the previous week, the dry bulk market’s growth momentum was about to lose steam, something proven yesterday, whe ...
Monday, 11 July 11
REFLECTIONS ON THE FLEET REACHING ONE BILLION TONNES - CLARKSONS / HELLENIC SHIPPING
“A billion gross tonnes of shipping” has a nice ring to it. It presents the industry as a business of substance, with its 85,000 ships w ...
Sunday, 10 July 11
UNTR PROVIDES US$100 MIO TO TTA - INSIDER STORIES
PT United Tractors Tbk (UNTR) agreed to allocate US$100 million to its coal subsidiary dubbed PT Tuah Turangga Agung (TTA).The US$100 million was pa ...
Sunday, 10 July 11
HARDLY ANY CARGO FROM WC INDIA UNTIL END OF MONSOONS - VISTAAR
COALspot.com - The BDI continued to hold last week and firmed up by 27 points with cape and panama index supporting the BDI.
The BDI closed at 1, ...
Sunday, 10 July 11
PTBA INCREASES SHARES IN COAL TRAIN PROJECT - TEMPO INTERACTIVE
TEMPO Interactive reported that, PT Tambang Batubara Bukit Asam (PTBA) is still studying the plan to buy 20 percent of shares in the PT Bukit Asam T ...
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- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- The University of Queensland
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Marubeni Corporation - India
- Commonwealth Bank - Australia
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