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Tuesday, 04 September 12
SHIP OWNERS' COMPETITION LEADS TO TANKER FIXTURES BELOW OPERATING COSTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 Ship owners operating in the VLCC tanker markets are increasingly finding it difficult to obtain even breakeven rates for their vessels, as competition has intensified. In its latest weekly report, Braemar Seascope noted that the willingness of owners to continue the trend of fixing their vessels at below operating costs, means that they are in essence paying for the pleasure of transportation for their clients. "By offering this service they are also increasing their maintenance costs, and it seems that for one reason or another, the "layup" option seems to have been taken off the table. There are a few owners who have said they are unwilling to fix at these levels. However, unfortunately for the three or four who refuse to trade, there are five or six who are willing to accept the prevailing levels. Owners have been adjusting ballast speeds to super-slow and other money saving methods, but this seems to be perpetuating the trend" said the report.
It added that "this week has seen charterers fixing steadily, drip feeding the market. Most cargoes have attracted offers until a full complement of 8-10 has been received and rates of previously done or lower have been concluded. Even in the face of rising bunker prices, PG/West has remained at 280kt x ws23.0 via Cape and in some cases, ws22.0 via Suez. This highlights the fact that fixing via the Suez Canal is a huge saving on bunker costs.
West Africa has been mirroring the PG. Rates are very low and flat at 260kt x ws36.0-37.0 for W Africa/East. W Africa/West has not really been traded as a very depressed Suezmax market has been able to fulfil requirements. From Indian charterers ex-W Africa this week, IOC entered the market for W Africa/EC India off 27-28 September. Charterers took advantage of the continuing pressure being put on rates in this region by the eastern ballasters, and fixed the business at just a whisker under the US$3.0m mark. With the September programme ex-W Africa completed, the Indian charterers are now awaiting the laycans for their early October stems, which we expect to see firm by mid next week. We are assessing W Africa/WC India at US$2.75m and W Africa/WC India at US$3.0m.
The 30 day availability index shows 53 VLCCs arriving at Fujairah, of which five are over 15 years old, compared to last week’s total of 55. So far for September we have seen 59 VLCC fixtures reported from PG, compared with a total of 116 for August. Despite resistance from those owners unwilling to trade, those willing to continue to conclude business at present freight levels are more than sufficient to satisfy charterers’ requirements. It remains to be seen how sustainable present freight levels and daily earnings can be" Braemar concluded on the VLCC markets.
SUEZMAX
Meanwhile, in the Suezmax front this week, the report noted that "the West Africa market maintained reasonable levels of activity without inspiring a noticeable improvement in rates. Cargoes have been taken on by owners rapidly, and the lack of resistance has led to rates mirroring those from last week. West Africa / US Gulf still sits at ws55.0 with the standard 2.5pt mark-up to US Atlantic Coast & UKCont-Med. Whilst most of the early vessels have been accounted for, the 2nd decade of September is overloaded and will soak up any imminent demand. With cargoes entering 3rd decade dates, this does not provide much promise for those owners who have been sitting tight. Unfortunately, with the Mediterranean not offering much respite, it looks like many of those owners across the Atlantic who can make these dates will opt to ballast into the West Africa region and perpetuate or even undercut current rates.
In the Mediterranean, despite a few eastbound cargoes fixing, activity has been low. Voyages to the Far East have been achieving US$2.9m to US$3.0m, with a trip to India fetching US$2.2m. Cross-Med fixtures have been scarce with a short Arzew / Lavera 130kt x ws65.0, offering little perspective on the actual market. Worryingly a Mediterranean –US Gulf run was fixed at just ws47.5. In the Black Sea, a couple of charterers have been active, with a market rate of 140kt x ws55.0 meeting little resistance from either party, and toward the end of the week ws52.5 was fixed to the US Gulf. Whilst the odd fixture east should have lightened the load, the position list is so bloated that realistic owners will want to fix and get out of the market as soon as they can, so eastern runs should be attractive.
Towards the end of last week several cargoes were open in the PG, but these have been whittled down. After last week's enthusiastic climb to ws75.0 PG/West, the crippling effect of a fixture at ws55.0 has continued, with ws52.5 and ws50.0 fixed. There has been flat activity going east, but enough to back up last week's estimation that this market has some legs. 118kt x ws79.0 to East Coast India might not be a great indication of the market, but 130kt x ws77.0 to Vadinar was backed up by 126kt x ws87.0 to West Coast India and hopefully the reasonable levels of activity will relieve the position list and support the market for PG-West fixtures" said Braemar.
AFRAMAX
Finally, in the Aframax market, the company's report said that "with a short fixing week following the UK Bank holiday, general activity has been marginally better than the previous two weeks. However, rates in the Baltic remain unchanged with the market still over tonnaged and demand quieter as expected in the month of August. TD17 remains flat at 100kt x ws60.0 and we expect no change looking in to next week. Cargoes from the ports of Primorsk and Ust-Luga are currently fixing in the 10-15 September window. North Sea demand has been more or less non-existent with TD7 rates also flat at 80kt x ws85.0. In the Mediterranean and Black Sea, it has been a very quiet week again. Compared to the available tonnage, enquiry has been minimal. Owners are accepting in the region of 80kt x ws77.5 for cross Med voyages, and from the Black Sea 80kt x ws79.0, which we estimate is close to breaking even in terms of earnings.
Currently, there is a Black Sea market quote, and with plenty of prompt ships spot in the Black Sea meaning ballast is minimised, we expect a few more points to be shaved off. At present, there are no signs of any improvements in the eyes of the owners. Further west in the Caribbean, with both the Amuay Bay refinery fire and hurricane "Isaac" causing some uncertainty and delays, one would have expected freight rates to move upwards on the back of it. Rates did firm slightly since this time last week to currently 70kt x ws95.0, however the Amuay Bay failed to have much impact and hurricane "Isaac" is not expected to have a lengthy impact. This of course, does not help the market or owners, but many will be pleased that hurricane "Isaac" is not expected to cause the same devastation as hurricane "Katrina" did seven years ago. Looking in to next week, we would expect the market to remain at current levels. It has been an exciting week in the PG with lots of action seen compared to previous weeks. PG/East rates are moving upwards to ws115.0 due to an influx of cargoes in the market, causing the availability of tonnage to thin down. Consequently, owner sentiment has remained bullish.
Indonesia/North Asia rates have softened to ws87.5 due to the current typhoon situation, where charterers are carefully withholding their requirements to avoid vessels missing their dates. Not much change to TD14 this week, with rates firming at ws90.0, providing a TCE of around US$5,700/day. Fixing volume out of NW Shelf to North Asia has been fairly light. Sustainability in rates is highly unlikely as activity slows and the tonnage list lengthens" Braemar concluded.
Source: Nikos Roussanoglou, Hellenic Shipping
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Thursday, 13 September 12
PANAMAX: THE NEGATIVE TREND, POOR SENTIMENT CONTINUES - FEARNLEYS AS
Handy
Lack of cargoes and a growing list of available ships is causing rates to slip for all Atlantic trades.
The only trade keeping somewhat s ...
Thursday, 13 September 12
FUEL EFFICIENT SHIPS MAY BE MORE EXPENSIVE, BUT THEY MAKE FINANCIAL SENSE SAYS ANALYSIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest trend in shipbuilding is the so called "Eco" ship, i.e. ships which offer much better fuel consumption and are more cost-effect ...
Wednesday, 12 September 12
INDIAS COALGATE: TIME FOR A ROOT CANAL
A recent report from India’s Comptroller and Auditor General (CAG) pertaining to the allocation of coal blocks has created a political storm i ...
Tuesday, 11 September 12
CLOUDY AND POLICY RISK INDONESIAN COAL INDUSTRY
COALspot.com - Bahana Securities in its latest coal outlook, commented on the Indonesian coal market, with economic slowdown in the four largest coa ...
Tuesday, 11 September 12
SHIP OWNERS KEEN ON SECOND HAND VESSEL PURCHASES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With most ship owners back from their summer rest, things are starting to pick up again in the second hand vessel market, with more and more deals b ...
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- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Bhatia International Limited - India
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
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