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Thursday, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 In its latest research note, BIMCO said 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, it reiterated its 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.According to BIMCO’s analysis “despite the the supply-side pressure, we put our money on black and forecast that Capesize rates are going to be supported by lower iron ore prices and coal demand for Winter heating in the coming months, thus we expect freight rates to stay sensitive to iron ore price developments but above USD 20,000 per day. A key observation from BIMCO is that we believe mining companies will prefer to sell this important steel production ingredient in larger volumes rather than higher prices, as long as China appears ready to purchase.
In order to deliver the support needed to keep rates elevated, Chinese iron ore imports will need a level of 61.2 million tonnes in both November and December, which in turn will bring the annual total import growth to +10% y-o-y. The supporting argument that must trump the negative impact from high stockpiles and slower steel production is the pricing game. China has built a firm reputation for playing the commodity markets well.
Looking beyond the Capesize fleet and into 2012, the smaller-in-size segments are going to experience a healthy slowdown in new deliveries. Right now, deliveries are estimated at 80 million DWT – equal to a fleet growth of 11.4%; a number that is likely to get slightly inflated by vessels that were set for December delivery but end up being January deliveries instead. A potential upside may also come from Russia, if they decide to impose a ban on grain exports to stop excessive outflow of the foodstuff. This will lead to longer hauls, as African and Middle Eastern importers will have to look for alternative sources potentially further away. Should they go to the most likely exporters, Australia or Argentina, the impact on the freight markets will be most significant” said BIMCO.
On the supply side, BIMCO’s Chief Shipping Analyst, Peter Sand said that the active fleet has grown by 12.9% so far in 2011, caused by delivery of 1,050 new vessels equal to 86 million DWT, offset by 20.9 million DWT being demolished. “We expect total demolition in 2011 to end at 23.5 million DWT as the activity is slowing down. Total inflow of tonnage in 2011 is going to hit 100 million DWT, surpassing 2010 inflow of new tonnage by as much as 20%. The fleet is about to grow by 14.5%, which is the highest level ever in net and gross terms.
By early December, 230 new Capesize vessels (+170,000 DWT) were delivered. That’s more than one new vessel every second day throughout the year. In total, BIMCO expects 245 new Capesizes will have been delivered in 2011 before New Year’s Eve. The projections for next year anticipates delivery of another 220 new Capesizes. Strong inflow of new tonnage and high amounts of recycled tonnage have brought the average age of the Capesize fleet down to 11.5 years from 13 at the start of the year. The level of new contracts dropped month by month as the year passed by. From close to 5 million DWT contracted in January, only 0.8 million DWT was contracted in October. This is a 29-months’ low level – an extremely positive development that bodes well for this segment of the industry, especially when seen in the perspective of the rise in freight rates during the past few months and owners not queuing up to place new orders” said Sand.
Just two months ago BIMCO released an analysis entitled: “Record recycling activity stirs optimism in dry bulk”. By that time, the potential of reaching 25 million DWT was within reach if high demolition rates were kept attractive to owners and rates did not improve significantly. Today, the “bull run” towards the recycling yards is over, demolition rates have come down in the Far East and Bangladesh has stopped taking in more new business. Meanwhile, average freight rates have stayed more or less unchanged, near year-high levels, making demolition activity cool down significantly.
On the demand side, BIMCO said that “while the workhorses in the Panamax and Supramax segments performed in line with the BIMCO forecast – hovering around USD 15,000 per day – Handysize vessels performed slightly worse than expected, tipping their toes just South of the USD 10,000 per day. On the very positive side, Capesize rates tackled the dip at end-October to see rates soaring again in November. The development is driven purely by vessels chartered to haul iron ore to China. Coming down from 28 chartered ships a week by mid-October, weekly activity dropped to 11 per week by the end of October, due to falling steel prices. However, activity rebounded strongly throughout November as iron ore prices fell rather significantly too to offset the negative impact from falling steel prices, according to Commodore Research. This development is mirrored perfectly in average time charter rates.
Export prospects for Russian wheat are still strong and building. This is evident from recent very strong sales following solid demand for vast volumes and competitively priced wheat, despite appreciation of the Rouble against other currencies. However, there are concerns arising in the wake of the success that Russia will impose grain export restrictions should total grain exports reach 24 million tons. In an attempt to export before restrictions are imposed, traders and producers are shipping a lot of output to ports, creating railway jams. Ironically, these jams lowered the pace of exports in October.
The Panamax and Supramax rates in the Atlantic basin have found only little support in the wheat and grains coming into the market via the US Gulf. Rates have come off over the past months, but should firm slowly as demand for thermal coal picks up as we head into the Winter in the northern hemisphere.
Overall demand in 2011 is likely to end at 6% y-o-y, while demand growth in 2012 is looking a bit softer at 4% y-o-y” concluded BIMCO.
Source: Nikos Roussanoglou, Hellenic Shipping
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Thursday, 05 January 12
DRY BULK MARKET TAKES A PLUNGE OF LOW ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was widely expected the first days of the new year are characterized by significantly low chartering across the board of the dry bulk market, pus ...
Wednesday, 04 January 12
NEWBUILDING ORDERS PICKED UP IN 2011, BUT 2012 EXPECTED TO BE A DIFFERENT STORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) starting the year on a sour note, losing 114 points and ending yesterday’s session, the first of the new year, ...
Wednesday, 04 January 12
MAHAGENCO TO IMPORT LOW MOISTURE COAL
COALspot.com - Maharashtra State Power Generation Co. Ltd. is the state power generation utility owned by Government of Maharashtra, intends to proc ...
Tuesday, 03 January 12
INDONESIA COAL REFERENCE PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the January 2012 coal reference price at US$ 109.29 per ton or US$ 3.3 ...
Tuesday, 03 January 12
WHICH WAY WILL THE DRY BULK MARKET HEAD ON FIRST WEEK OF THE YEAR? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Dry bulk ship owners will be wondering which way will the BDI (Baltic Dry Index), the industry’s benchmark, will head during the first days of ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- PTC India Limited - India
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
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