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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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Monday, 19 December 11
PLN WILL NO LONGER BUY COAL FROM TRADERS
COALspot.com - Indonesia's state electricity company PT Perusahaan Listrik Negara will no longer allow traders to become their suppliers, said, its ...
Saturday, 17 December 11
THE FREIGHT MARKET SEEMS TO HAVE ALMOST BOTTOMED OUT AND MAY REMAIN STEADY AT THESE LEVELS CAPT REDDY
COALspot.com - The BDI and Cape index closed lower this week with BDI closing at 1,888 points (down by 1.76 pct) and Cape index at 3,572 points (dow ...
Friday, 16 December 11
DRY BULK MARKET LOSES TRACK ON CAPESIZE LOSSES, SHIP FINANCING REMAINS TROUBLESOME - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn’t manage to sustain earlier gains, losing track yesterday, on reduced Capesize demand and persisting troubles in smal ...
Thursday, 15 December 11
BERAU SEES INDIA AS POTENTIAL MARKET FOR LOW-CALORIE COAL - THE JAKARTA POST
The Jakarta Post reported that, Publicly listed coal mining company PT Berau Coal Energy (BRAU), the fifth largest coal producer in Indonesia, sees ...
Thursday, 15 December 11
PANAMAX HARDLY AFFECTED BY THE RECENT FIRMER TENDENCY FOR THE BIG SISTERS - FEARNBULK
Handy
The rates are more or less the same as last week. Continent/US Gulf fixing at tick below USD 10k and Gulf/Continent levels at USD 25k. Trips ...
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Showing 4926 to 4930 news of total 6871 |
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- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Indian Energy Exchange, India
- White Energy Company Limited
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Australian Coal Association
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