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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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Thursday, 19 May 11
INDONESIAN COAL EXPORTS DROP 7.98 PERCENT IN APRIL
COALspot.com - Indonesian coal exports dropped to 2.168 million tons in April, and up 7.13 percent on the year and 7.98 percent below March, a ...
Thursday, 19 May 11
OVERSUPPLY, VERY LARGE ORE CARRIERS EAT UP ON DRY BULK FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a brief upward momentum which ended early last week, the Baltic Dry Index, the dry bulk market’s benchmark has returned to its usual pat ...
Wednesday, 18 May 11
THE US COAL INDUSTRY LOGGED EXPORTS OF AROUND 25M TONNES IN 1Q OF 2011 - BRS
Another slow decline in the bulk markets this week, with the BCI losing the most at nearly 5%, the BPI 2.8% and the smaller sizes sub-1% amounts. Th ...
Wednesday, 18 May 11
AKR AIMS TO SELL COAL WORTH RP216 BILLION - PAPER
Bisnis Indonesia, an Indonesia's one of the leading business paper reported that, PT AKR Corporindo Tbk has targeted coal sales valued at Rp216 bil ...
Wednesday, 18 May 11
OVERHAUL OF MINING LAW MAY DETER INVESTMENT, S&P SAYS - THE JAKARTA GLOBE
The Jakarta Globe, an Indonesian English language news paper reported that, A report by Standard & Poor’s Ratings Services that a regulatory ...
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- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Planning Commission, India
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Australian Coal Association
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
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