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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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Thursday, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
Thursday, 22 December 11
DRY BULK MARKET KEEPS LOSING TRACTION AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept retreating in the middle of the week, as charterers seem to be looking towards the holiday season and the start of the new ye ...
Tuesday, 20 December 11
THE COAL IMPORT INTO CHINA WAS QUIETER AS COAL STOCKS WERE AT HIGH LEVELS - BRS
The BDI ended the week at 1888 points (-1.8%), the BCI corrected to 3572 (-3.4%), the BPI was up at 1,775 (+3.6%), the BSI dropped to 1193 (-3.0%) a ...
Tuesday, 20 December 11
INDIA IMPORTS 66.41 PERCENT MORE COAL FROM INDONESIA LAST MONTH - SOURCES
COALspot.com: Indonesia, the world largest coal exporter, shipped 33.476* mln mt of coal in November, which is slightly higher than its Octobe ...
Monday, 19 December 11
KOPEX COMMITS ADDITIONAL ONE MILLION DOLLAR FOR PT TRANSCOAL MINERGY
COALspot.com - Mining contractor Kopex has agreed to extend a further US$1 million to finance the remainder of the expanded drill program at PT Tran ...
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- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Planning Commission, India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
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