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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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Friday, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
Thursday, 01 December 11
DRY BULK MARKET RISES TO NEW HEIGHTS ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on rising this week, with the industry’s benchmark, the Baltic Dry Index (BDI) climbing to 1,846 points on Wednes ...
Tuesday, 29 November 11
SOUTH AFRICAN COAL INTO CHINA, THE ACTIVITY WAS SLOW - BRS
Capesize
The Capesize market in Atlantic stayed pretty firm last week with transatlantic rounds being fixed in the high twenties. Sentiment was les ...
Tuesday, 29 November 11
GOLDEN GATE BRIDGE OF INDONESIA COLLAPSED AT KUKAR, EAST KALIMANTAN
COALspot.com - A suspension bridge in Indonesia’s east Kalimantan province over the Mahakam river collapsed on Saturday, killing at least elev ...
Tuesday, 29 November 11
BUKIT ASAM SCOUTS RP3 TRILLION PROFIT - INSIDER STORIES
The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above ...
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- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- White Energy Company Limited
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- The University of Queensland
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- MS Steel International - UAE
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Planning Commission, India
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
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