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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, 17 November 11
KOMIPO INVITES BIDS FOR 500K MT OF COAL
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids for the supply of 500,000 Metric Tons of minimum 5700 kcal/kg coal of NAR bases ...
Thursday, 17 November 11
INDONESIAN GOVERNMENT PLANS TO ISSUE MORATORIUM ON COAL MINING LICENSE
COALspot.com - Energy and mineral resources ministry is plans to issue a moratorium on the issuance of coal mining licenses, after the anti-graft co ...
Wednesday, 16 November 11
KRISHNAPATNAM PORT BECOMES DEEPEST DRAFT PORT IN INDIA
COALspot.com - Krishnapatnam Port in its quest to be the best port in India has increased its draft to 17.5 meters, according to E-Mail statement fr ...
Wednesday, 16 November 11
CHINA'S INDONESIA COAL IMPORTS RISE IN OCTOBER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31,162,688 MT of coal in October 2011.
China was a largest importer of Indonesi ...
Wednesday, 16 November 11
TAX OFFICE VOWS TO CRACK DOWN ON COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry’s Directorate General of Taxation says that it will strengthen its supervision of coal mi ...
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- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- The University of Queensland
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
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