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Wednesday, 13 April 11
CAPESIZE VESSELS ARE DELIVERED AT A PACE OF ONE NEW VESSEL EVERY SECOND DAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 In a clear sign that it will take a significant rise in global seaborne dry bulk trade in order to be able to absorb the flurry of new building tonnage thrown into the water, BIMCO has issued a new report, saying, among others, that at the moment Capesize vessels are delivered at a rate of one new vessel every second day. On top of that, 6 VLOC’s have been launched with another 35 potentially up for delivery in 2011 (adjusted for slippage). The report also said that the active fleet has grown by 2.7% so far in 2011, caused by deliveries of 222 newbuilt vessels with an average cargo capacity of 85,000 DWT offset by 67 vessels with a total capacity of 4.8 million DWT being demolished.
On the positive side, “like in the tanker segments, demolition finally, but still surprisingly, has kicked off strongly – positively impacted by the high scrap steel prices. A 25 year-old large Capesize demolition was worth almost USD 11 million. However, the level of demolishing is still considerably below a level that could balance supply and demand and impact the freight markets positively” said the report by BIMCO’s shipping analyst, Peter Sand. “BIMCO forecasts inflow of new dry bulk tonnage in 2011 to be a bit higher than in 2010 at 86 million DWT. As demolitions are expected to reach 12 million DWT, the fleet is forecast to grow by 13.8% in 2011. Newbuilding contracts are being signed at the slowest pace since Q2 in 2009. This is a very positive development, especially seen in the light of the unbelievable high contracting level in 2010 with 78 million DWT of new contracts” said the report.
In terms of the dry bulk market’s outlook, BIMCO said that “the events in Japan, will, in the short term, be a negative story for the dry bulk market as expected high volumes into Japan will be some 10-20 million tons lower, as coal power plants and steel mills have be shut down for a while and some are expected to be so for up to 1 year. In the medium to long term, dry bulk is likely to benefit as reconstruction takes off. Iron ore, coking coal, thermal coal and wood for construction are likely to be in higher demand following the disasters. Unlike Australia, which was a supply story, Japan is mainly about demand falling short – the impact on the freight market has been insignificant as compared to the flooding in Queensland.
BIMCO assesses that Capesize freight rates will remain in depressed territory in the coming months. Capesize Time Charter Average is likely to hover around USD 10,000–15,000 per day and backhaul trip charter earnings likely to continue to make negative returns.
The Capesize fleet has already grown 4.5% this year and overcapacity in the segment will stay a drag on freight rates each time they try to escape the doldrums. Supramax and Panamax are likely to stay firm in the USD 15,000–USD 20,000 per day interval as demand supports this level. Overall, dry bulk commodity demand growth is expected to be around 7-8% in 2011, with iron ore and coal as usual in the driving seat. This outlook provides a solid demand picture to comfort and fence a collapse of earnings, as oversupply is haunting all segments” said the report.
For the time being though, since early January, Capesize time charter rates have been below all the other segments including Handysize. While the 3 smaller segments have rebounded since then, Capesize is still down. “Current average of 4 time-charter routes is USD 10,371 per day. For comparison – a Handysize makes USD 11,849 per day, a Supramax USD 15,921 per day and a Panamax USD 15,807 per day. Spot rates on main Capesize iron ore trades from Brazil and Australia, which are the top two suppliers to the Chinese steel industry, look as if they have bottomed out during January and February. This year’s unfolding story in relation to iron ore trades will be the scheduled delivery of the first 6 out of 19 400,000 DWT VLOC’s to the Brazilian miner, Vale. This is expected to impact the market, as Vale is a large charterer of Capesize tonnage to service its Asian customers. In 2010, Vale exported 131 million tons to China. Estimating 6 round voyage a year, the 6 new build VLOC’s will be able to carry 14.4 million tonnes of iron ore p.a., equal to 11% of Vale exports to China. With another 13 to be delivered over the next 2-3 years, Vale will depend much less on the Capesize chartering market – as it will be self-sufficient in 25-30% of its tonnage demand. The vessels are intended to bring down Vale’s price disadvantage to the Australian iron ore by taking out the longhaul maritime transportation cost element. The spot rates are on average 2½ times higher on Brazilian ore, being a close mirror of the difference in distance.
It remains uncertain where Vale is going to establish its Asian iron ore distribution centre. First Qingdao was targeted, but failed to become a done deal. Lately Vale has focused on a Malaysian distribution hub, but another site remains an option, the Tianjin Dongjiang Free Trade Port Zone near Beijing – a new giant port and logistics centre. The final location will be vital to the success of VLOC’s.
Seaborne Iron ore demand is expected to grow by 7% overall, where China will take the most and European demand will increase to a precrisis level.
Also recently, the commodities trader Cargill has decided to become a ship owner once again, this time round mainly with the purpose of being an asset player. This adds to the number of large charterers making an entry into ship owning primarily with the object of controlling a larger part of the supply chain and converting variable costs to fixed costs.
The demand for taking Capesize vessels on time charter is on a par with last year. Time charter rates are currently higher than spot freight rates, which indicates an extraordinarily weak spot market. Representative deals that support the rather flat medium term expectation in the market are, amongst others, Cargill taking the “Semirio”, 174,000 DWT for two years at USD 17,000 per day and Rio Tinto taking “Bulk India”, 177,000 DWT for one year at USD 16,500 per day”, concluded BIMCO’s analysis
Source: Nikos Roussanoglou, Hellenic Shipping
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Saturday, 28 May 11
WCI-CHINA RATES SLIDED TO 15K AND FROM ECI AROUND 12K - FEARNLEYS AS
Handy
Rates in the Atlantic remain steady/flat with the Black Sea remaining quiet with little fresh enquiries. The Continent is seeing more tonnag ...
Saturday, 28 May 11
GOLDEN MINES IPO AT RP 2,300 - RP 3,500
Coal miner PT Golden Energy Mines, a wholly owned subsidiary of PT Dian Swastatika Sentosa Tbk (DSSA) which is controlled by Indonesian businessman ...
Friday, 27 May 11
LARGER DRY BULK CARRIERS LEAD BDIS RALLY THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Larger dry bulk vessels have kept on leading the market’s rise this week, with the BDI (Baltic Dry Index) rising by a more than healthy 3.43% ...
Wednesday, 25 May 11
70 PERCENT OF HARUMS PRODUCTION SOLD - BISNIS INDONESIA
Coal producer PT Harum Energy Tbk claimed that out of this year's total production target of 10 million tons, 70% or 7 million tons had been sold, ...
Wednesday, 25 May 11
MINERS BACK GOVT PLAN TO FREEZE MINING PERMITS - THE JAKARTA POST
Indonesian coal miners hailed the government’s decision to impose a moratorium on the issuance of new mining permits, saying the freeze would ...
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- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
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