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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, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest research note, BIMCO said that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply w ...
Wednesday, 14 December 11
MINER TOBA BARA SEJAHTRA PLANS IPO IN 1ST HALF OF 2012 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Coal miner Toba Bara Sejahtra is aiming high next year, hoping to capitalize on renewed bullish sentiment in the lo ...
Wednesday, 14 December 11
TIMAH PLANS TO BOOST ITS COAL PRODUCTION TO TWO MILLION TONS PER ANNUM - SOURCES
COALspot.com - Timah plans to boost its coal production to two million tons per annum. The company also expects to acquire coal concession with mini ...
Wednesday, 14 December 11
BORNEO RESOURCE INVESTMENTS LTD. FINALIZES ACQUISITION OF INTEGRA PRIMA
COALspot.com - Borneo Resource Investments Ltd., announced that it has finalized the acquisition of an additional 1,300 hectare coal mining concessi ...
Tuesday, 13 December 11
BERAU COAL SCOUTS US$1.61 BIO SALES - INSIDER STORIES
Insider Stories reported that, coal mining company PT Berau Coal Energy Tbk (BRAU), that is 85% owned by London-listed company Bumi Plc, estimates a ...
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- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- SMG Consultants - Indonesia
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