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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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Monday, 19 December 11
PLN WILL NO LONGER BUY COAL FROM TRADERS
COALspot.com - Indonesia's state electricity company PT Perusahaan Listrik Negara will no longer allow traders to become their suppliers, said, its ...
Saturday, 17 December 11
THE FREIGHT MARKET SEEMS TO HAVE ALMOST BOTTOMED OUT AND MAY REMAIN STEADY AT THESE LEVELS CAPT REDDY
COALspot.com - The BDI and Cape index closed lower this week with BDI closing at 1,888 points (down by 1.76 pct) and Cape index at 3,572 points (dow ...
Friday, 16 December 11
DRY BULK MARKET LOSES TRACK ON CAPESIZE LOSSES, SHIP FINANCING REMAINS TROUBLESOME - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn’t manage to sustain earlier gains, losing track yesterday, on reduced Capesize demand and persisting troubles in smal ...
Thursday, 15 December 11
BERAU SEES INDIA AS POTENTIAL MARKET FOR LOW-CALORIE COAL - THE JAKARTA POST
The Jakarta Post reported that, Publicly listed coal mining company PT Berau Coal Energy (BRAU), the fifth largest coal producer in Indonesia, sees ...
Thursday, 15 December 11
PANAMAX HARDLY AFFECTED BY THE RECENT FIRMER TENDENCY FOR THE BIG SISTERS - FEARNBULK
Handy
The rates are more or less the same as last week. Continent/US Gulf fixing at tick below USD 10k and Gulf/Continent levels at USD 25k. Trips ...
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- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Planning Commission, India
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
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