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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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Wednesday, 26 October 11
INDIAN MARKET WAS REMAINED TIGHT THE WHOLE LAST WEEK - BRS
The market once more seems to be at a crossroads. The indices last week remained fairly stable (except for the Panamax sector), ending the week as f ...
Tuesday, 25 October 11
DRY BULK MARKET STEADY, ANALYSTS LOOKING FOR ADDED PRESSURE ON THE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was unchanged on Monday, with the industry’s benchmark, the BDI (Baltic Dry Index) ending the session at 2,153 points, exa ...
Monday, 24 October 11
NEW HEAD OF INDONESIA'S MINING MINISTRY GETS RAKED OVER THE COALS - JOSEPH KIRSCHKE
COALspot.com - Following Indonesia’s presidential cabinet shakeup last week, many are questioning the qualifications of Energy and Mineral Res ...
Monday, 24 October 11
CHINA QINHUANGDAO COAL PRICE RISES TO HIGHEST IN THREE YEARS - BUSINESSWEEK
Business week reported that, China’s power-station coal price rose to the highest level in three years as power stations and central heating p ...
Monday, 24 October 11
CAPESIZE RENTAL RATES RISE FOR THIRD DAY AS MORE SHIPS HIRED - HELLENIC SHIPPING
Rates to hire capesize vessels advanced for a third day on signs of increased demand to transport iron ore, used to make steel.Daily rates for the s ...
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- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- PTC India Limited - India
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Australian Coal Association
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
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