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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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Thursday, 20 October 11
BRACKEN INTERNATIONAL MINING LISTS ON FRANKFURT STOCK EXCHANGE
Press Release - Bracken International Mining (Code:1BM) listed on the Deutsche Börse’s Frankfurt Stock Exchange today at €1.00 with ...
Thursday, 20 October 11
CAPESIZES, SUPRAMAXES LEAD GAINS FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Struggling to find additional support, but still managing to post gains, the dry bulk market has stabilized itself on higher levels again yesterday, ...
Wednesday, 19 October 11
METALLURGICAL COAL PRICES TO DROP BELOW US$240/TONNE - WOOD MACKENZIE
Wood Mackenzie Says Metallurgical Coal Prices to Drop Below US$240/tonne by Q4 2012 But Long-term Demand Fundamentals Remain Robust
Wood Mackenzi ...
Wednesday, 19 October 11
SUPRAMAX MARKET WAS VERY FIRM LAST WEEK - BRS
With all sectors contributing positively, the BDI ended the week at 2,173 points (+8.6%), its highest level so far in 2011. The BCI stood at 3,587 ( ...
Wednesday, 19 October 11
ADARO ACQUIRES BUKIT ENIM ENERGI - INSIDER STORIES
Insider Stories reported that, Coal miner PT Adaro Energy Tbk, via its subsidiary dubbed PT Alam Tri Abadi, today revealed a 46% stake takeover of a ...
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- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- VISA Power Limited - India
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- The University of Queensland
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
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