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Monday, 12 December 11
DRY BULK MARKET LOOKING FOR BALANCE AS WE ENTER 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 During the past few months, freight rates for dry bulk carriers, especially Capesizes have increased significantly, providing ship owners with a much needed boost. Still, the oversupply haven't been solved overnight. This will take a few more years to happen, provided that newbuilding orders remain at modest levels and scrapping of older ones doesn't seize.In an interview with Hellenic Shipping News Worldwide, BIMCO's
Chief Shipping Analyst, Peter Sand said that for the coming couple of months, BIMCO holds the view that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day. but the tonnage oversupply will eventually hit back. "Meanwhile, we reiterate our forecast on the Panamax and Supramax freight rates that are likely to stay put in the USD 13,000-17,000 per day interval. Handysize rates are expected to gain traction and return to the USD 9,000-13,000 per day interval" said Sand.He went to add that 2012 is likely to become as challenging as 2011. The pressure from the supply-side is set to ease a bit and drift down to around 11-12% but unfortunately the demand-side also looks set to end on the softer side of 2011.
Looking back in 2011, how would you describe this year in terms of dry bulk freight rates and the general movement of the industry’s benchmark, the BDI (Baltic Dry Index)?
Following the positive surprise that the industry experienced during 2010, 2011 have been very different. The combination of several demand-side disruptions and a freak wave of new built tonnage entering the fleet, has made the BDI drop by a significant 44% y-o-y. The fact that the amount of tonnage that went to the breakers was double-up on our initial forecast helped a lot, but cannot prevent the overall fleet to grow by 14%.
The year has been full of surprises. I’ll guess only very few had foreseen the main events of 2011 before they actually happened. The “Arab spring”, the massive flooding in Australia and South Africa and the triple disaster in Japan all events that was affecting dry bulk as well as wet bulk to a large extent. The Capesize segment was mostly hurt. During the first half of year, average time charter earnings of USD 8,500 per day only just covered OPEX for most vessels, leaving nothing to pay financial costs. But after a bit of a summer lull for Capesizes, freight rates really took off in August when China resumed massive buying of iron ore at a time when tonnage was tight in Atlantic basin. Congestion in both exporting and importing ports went up and lifted rates to year-high level where they are still hovering. The fact that the freight rate today is close to USD 30,000 per day is a positive surprise too – framing a year full of surprises and ending it on a happy note.
How is the current balance between demand and supply being shapen up?
The winter market is providing some support to the markets – and when you look at rates for Panamax and Handymax at USD 15,000 per day it actually not that bad when you look at it from a historical perspective. Trouble is of course that the fleet that ploughs the seas today is purchased at relatively higher prices than ever before – requiring higher rates to break even – when taking account of financing costs on top of ordinary OPEX.
For the coming couple of months, BIMCO holds the view that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply will eventually hit back. Meanwhile, we reiterate our forecast on the Panamax and Supramax freight rates that are likely to stay put in the USD 13,000-17,000 per day interval. Handysize rates are expected to gain traction and return to the USD 9,000-13,000 per day interval.
Despite struggling rates for the most part of the year, 2011 also saw a lot of newbuilding orders for dry bulk carriers. Which factors triggered this development?
From a fundamental point of view – the amount of tonnage that has been ordered during 2011 is sustainable; if you look at 2011 in solitude. Tonnage equivalent to 4% of the active fleet is a more or less what is required to renew a fleet that has a lifetime of 25 years. Moreover it is actually the lowest level of new orders placed since 2002, surpassing even 2009 where 35.6 million DWT was ordered. However, the problem is that 2010-2013 are all years of massive inflow of new tonnage. In order to get the balance back we should have a couple of years with deliveries below the sustainable trend to let demand catch up and balance the market once again.
It seems that 2011 was a record year for demolition activity of older vessels. Would things be a lot worse, shouldn’t those vessels had been sold for scrap?
The amount of demolished tonnage during 2011 has been a much welcomed wonder. And it has certainly provided some relief to the markets, mostly in the larger segments and specifically amongst Capesizes. The pressure on these big ships in particular has been eased by this. A few numbers illustrates this very clearly. The number of Capesize scrapped during 2011 (approx. 68) is equal to the number of Capesize vessels being scrapped during the preceding ten years! In the case that no Capesizes had been recycled the segment would have grown by more than 20% - matching the level of 2009 and 2010. But the demolition activity has cut growth by some 5%.
Do you expect a similar record of demolitions in 2012 as well, or is this dependant upon market swings?
Since freight rates took off in the Capesize segment by mid-August, only few vessels have been sold for recycling. The correlation between freight rates and the amount of recycled tonnage is quite strong right now. BIMCO do not foresee the record from this year to be duplicated in 2012. Our forecast for 2012 is that 10 million DWT is going to leave the fleet by demolition. But the estimate contains a pure upside potential, if rates are facing heat to the tune of first-half of 2011.
Going forward into 2012, do you expect newbuilding deliveries to outpace demand again, or will things slow down versus 2011?
In BIMCO we foresee that 2012 is likely to become as challenging as 2011. The pressure from the supply-side is set to ease a bit and drift down to around 11-12% but unfortunately the demand-side also looks set to end on the softer side of 2011. This leave the present fundamental imbalance between supply and demand more or less all-square – but as the global economy is still in a very fragile condition that now also means that China is slowing down, most risk are probably to be found on the downside.
Which will be the average rates for dry bulk ship types in 2012, according to your view and why?
We see 2012 is likely to become another 2011 on average. As China and India is going to grow a tad slower in the coming year this is like to limit the upside risk to our scenario. The global economic situation must be resolved before demand can surprise on the upside to a large extent. The yards will probably set 80 million DWT of to sea during the year – but handling the supply side remains an internal job. Use a variety of tools from the toolbox: slow steam, postpone/delay delivery, sign only new orders to a very limited extent, focus on customers and work closely together with all your stakeholders.
Source: Nikos Roussanoglou, Hellenic Shipping
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Wednesday, 15 February 12
HBA FOR FEB 2012, CLIMBS 2.09 PERCENT AND REACHED US$ 111.58 PER TON
COALspot.com - The Indonesian coal reference price for February climbs 2.09 percent to US$111.58 per ton after losing past three months. ...
Monday, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
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- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- The University of Queensland
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
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