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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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Saturday, 15 October 11
BENGAL COAL IMPORT TEST - THE TELEGRAPH
The Telegraph reported that, the power position in Bengal improved today but alarm bells are ringing over imported coal stocks that are running out ...
Friday, 14 October 11
CAPE DERIVATIVES MARKET HAS NOT REFLECTED OWNERS EXPECTATIONS' - FEARNBULK
Handy
The Atlantic market continued its upward trend, with fresh cargo entering the market. Skaw Passero to US Gulf climbed US$ 1500 from la ...
Friday, 14 October 11
ADARO BUYS SERVO MEDA FOR RP200 BIO - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) announced that its subsidiary PT Alam Tri Abadi (ATI), acquired 35% stake in PT Serv ...
Thursday, 13 October 11
DRY BULK MARKETS RALLY CONTINUES, BUT ANALYSTS WARN IT WILL BE SHORTLIVED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market continued its push forward yesterday, for yet another session, as the BDI (Baltic Dry Index), the industry’s benchmark edg ...
Wednesday, 12 October 11
INDONESIAS COAL RUSH - JOSEPH KIRSCHKE
COALspot.com - Last winter, the Chinese government mobilized thousands of soldiers and reservists of the People’s Liberation Army to the port ...
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- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
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- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
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- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
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- White Energy Company Limited
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- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
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- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Minerals Council of Australia
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- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
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- CNBM International Corporation - China
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- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- PTC India Limited - India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- The University of Queensland
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Australian Coal Association
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
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