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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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Sunday, 08 January 12
THARPAK CONSORTIUM FORMED TO DEVELOP MEGA ENERGY COMPLEX IN SINDH PROVINCE, PAKISTAN
Press Release: On January 5th, TharPak, LLC met with officials of the Embassy of Pakistan in Washington DC to introduce and announce the formation o ...
Saturday, 07 January 12
COAL MARKETS SEE FALLING SPOT PRICES
COALspot.com – World’s thermal coal spot prices have slipped this week..
globalCOAL index in Newcastle Port, benchmark for Asian mark ...
Friday, 06 January 12
COAL INDIA LINKED COAL PRICES WITH INTERNATIONAL COAL PRICES
COALspot.com - Consumers of indigenous coal in India to pay International prices in the future. Coal India has recently moved from UHV pricing mecha ...
Friday, 06 January 12
CLARIDEN GLOBAL BRINGS YOU INDONESIA MINING 2012
Capitalizing Business & Investment Opportunities in an Uncertain Market.Press Release - Clariden Global brings you Indonesia Mining 2012, the dedi ...
Friday, 06 January 12
THE PANAMAX MARKET EXPERIENCED A SLOW START TO 2012 - FEARNLEYS AS
Handy
As usual after a holiday owners and charterers both try to get a feel of the market. An Armada of Supras were talking to ballast towards USG, ...
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- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- The University of Queensland
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
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