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Monday, 21 November 11
CAPESIZES DRIVE MARKET LOWER, ANALYSTS DIVIDED ON DRY BULK OUTLOOK IN THE LONG RUN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 The dry bulk market ended the week on a sour note, with the industry’s benchmark heading downwards to 1,895 points, which represented a slight fall of 0.16%. Capesizes were the main drivers of this trend, with the market falling by 0.71%. Still, the rest of the market segments were higher, with Panamaxes leading the pack, with an increase of 1.38%. In a recent report, consultant analysts PriceWaterHouseCoopers (PwC) said that the size of the Capesize fleet is forecast to rocket over the next three years at the same time as demand growth for seaborne iron ore is set to stagnate. In its report ‘Dry Bulk Shipping - Capes of no Hope?’, PwC said that there are currently 1,200 Capesize vessels worldwide at a value of $45billion but it is estimated that a further 450 more are on order over the next three years which will flood the market. While some of these orders may be delayed or cancelled, the global order book implies there will be rapid growth in seaborne transport of iron ore and coal, the main commodities carried by Capesizes.
David Smith, Assistant Director, PwC Strategy said that "as in other sectors of the shipping industry, dry bulk market participants are assuming that the next decade will look very much like the last in terms of patterns of trade flow growth. This has led to continued orders of new vessels on the assumption that Chinese demand for iron ore will continue to grow rapidly, but our estimates show that growth will be much lower in the future. The reality is that the ‘expected’ growth demand for iron ore is unlikely to materialise given the already high rate of infrastructure investment in China. This will leave a substantially increased number of vessels chasing a broadly unchanged level of cargo, with negative implications for rates. The situation, he added, will be exacerbated by the vessel building programmes being undertaken by the large mining companies. This will decrease the amount of cargo available on the spot market, at a time when the fleet is increasing dramatically, said Mr. Smith.
He went on to mention that "while rates in the Capesize sector have improved over the last three months, we see this as a temporary respite. Continued overcapacity is likely to push rates back towards operating costs, creating significant pressure for owners trading in the spot market.” “The worry, he said, is that these pressures will not be confined to the ship owning community. Low rates over a prolonged period will make it difficult for ship owners to keep up payments to the banks which have made substantial investments in the sector. Major sources of shipping finance include the UK, Germany, Greece, and Scandinavia, with UK banks alone having loans of over $50bn to the shipping sector” concluded Mr. Smith.
Meanwhile, in a separate report, shipowner Golden Ocean said that “most analysts agree that the dry bulk market does not have a demand problem. Iron ore and coal imports to China and coal imports to India are expected to grow at a steady pace over the next 5 years. A lot of new iron ore capacity will enter the market from 2013 onwards, which could put a downward pressure on international iron prices. This should support the freight market due to expensive, low quality Chinese iron ore production. However, the order book for the remainder of this year and 2012 is still a major concern and is the main reason why the forward freight assessment (FFA) is in backwardation.Despite the positive development in the freight market, asset values dropped further during third quarter. A five year old Capesize was priced at $39 million while a newbuilding resale was priced at approximately $50 million. There is a lot of uncertainty related to asset values going forward, but we observe that more forecasters state that they see limited downside” said Golden Ocean.
Analyzing the trade patterns noted during the third quarter, the company mentioned that “the third quarter of 2011 was yet another quarter which surpassed most analysts’ expectations. Given the large order book with record high deliveries both this year and next, it has been difficult to imagine a demand scenario which was able to cope with supply growth and maintain utilization at levels giving owners of dry bulk tonnage decent returns. Capesizes experienced a steady rise from bleak levels. Iron ore is the main commodity carried by Capesizes and China increased its import by more than 17 percent compared to same quarter previous year. Coal imports to China increased by almost 30 percent year-onyear.
In addition, other Asian countries contributed to the strong demand growth. Korea increased its iron ore imports by more than 20 percent and the rebuilding of Japan after the March 2011 earthquake and tsunami also contributed positively. These high growth numbers alone are still not sufficient to explain a utilization rate, which averaged 85 percent last quarter. Congestion remains as a positive factor for owners and between six to eight percent of vessel capacity was tied up in the third quarter” said Golden Ocean.
It further mentioned that “Chinese coastal trade increased by 17 percent during the third quarter and more than 300 million tons of dry bulk commodities was carried off the Chinese coast. On an annual basis, this represents 20 million dwt capacity. We have not seen the same focus on slow steaming in dry bulk as in other segments. However, analysis shows that average speed of the sailing fleet has dropped by more than two knots since 2008. This is not due to an effort to improve market conditions but rather a function of high bunker prices and optimizing earnings. Still, the focus has to be on the order book. So far this year approximately 205 vessels in the Capesize segment have been delivered, but at the same time almost 70 vessels of the same size have been scrapped. Delivery ratio compared to the official order book remains below 70 percent” concluded Golden Ocean.
Source: Nikos Roussanoglou, Hellenic Shipping
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Tuesday, 01 November 11
DRY BULK MARKETS CORRECTION SPILLS OVER ONTO NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is losing steam, as evidenced by the falls experienced last week, which were also apparent at the beginning of the new week. A l ...
Monday, 31 October 11
CHINAS HUNGER FOR INDONESIAN COAL AT THREE YEAR-HIGH AS WINTER NEARS - JOSEPH KIRSCHKE
COALspot.com - Chinese demand for power-station coal from Indonesia has soared to its highest level in three years, as central heating plants and po ...
Saturday, 29 October 11
ATLAS RESOURCES SEALS US$95 MIO LOAN - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, has secured US$95 mill ...
Saturday, 29 October 11
INDONESIA TO INDIA FREIGHT LIKELY TO REMAIN SOFT
COALspot.com - The market continued to slow down and all segment were down this week.
The biggest drop was in the Cape Index down by 8.19 pct&nbs ...
Friday, 28 October 11
RISING COAL PRICES TO WORSEN CHINA'S WINTER POWER CRUNCH - CRI ENGLISH
CRI English reported that, the rising price of coal is fueling concerns about a power crunch set to plague China this winter, analysts said.
The ...
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- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Indogreen Group - Indonesia
- PTC India Limited - India
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
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