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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, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
Friday, 25 November 11
DISPUTE BETWEEN GIANT MINING FIRMS ENDS IN LAHAT - THE JAKARTA POST
The Jakarta Post reported that, prolonged dispute taking place in the South Sumatra regency of Lahat and involving two giant mining companies PT Buk ...
Friday, 25 November 11
DRY BULK MARKET LOSING STEAM, FAST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s been a week of falls for the dry bulk market this one, leaving ship owners with a sour taste in their mouths, as evidence of a recovery i ...
Thursday, 24 November 11
INDONESIA/INDIA SPMX TC AROUND $ 7/8K AND AROUND $ 12/13.00 PMTS ON VOYAGE BASIS - FEARNLEYS
Handy
Last week ended on a positive note in the Atlantic however the activity levels are somewhat reduced. Owners are asking in excess of USD ...
Thursday, 24 November 11
DRY BULK MARKET KEEPS LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was lower once again on Wednesday, with the industry’s benchmark, the Baltic Dry Index (BDI) ending the session down by 1. ...
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- Global Business Power Corporation, Philippines
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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