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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, 07 May 11
BERAU INKS DEALS WITH CHINESE FIRMS AS COAL WEATHERS COMMODITIES STORM - THE JAKARTA GLOBE
The Jakarta Globe reported that, Berau Coal, one of the country’s largest coal miners, has signed sales contracts with two Chinese companies a ...
Saturday, 07 May 11
SUPRAMAXES ARE AT AROUND $ 13,500-14,000 PER DAY FOR SINGLE TRIPS
COALspot.com - The freight remained fairly steady this week with the BDI up by 71 points and closing at 1,340 points, said Capt. Reddy, the director ...
Saturday, 07 May 11
COAL PRODUCTION MAY REACH 95M TONS IN SECOND QUARTER - THE JAKARTA POST
The Jakarta Post reported that, Indonesian miners are projected to produce around 95 million tons of coal in the second quarter of this year after l ...
Friday, 06 May 11
BUKIT ASAM TO CLOSE COAL TAKEOVER IN Q2 - INSIDER STORIES
The state-controlled PT Tambang Bukit Asam Tbk (PTBA) expects to complete acquisition of two coal mining companies from four companies which is now ...
Thursday, 05 May 11
SUPRAS IN NORTH CHINA ARE GETTING CLOSE TO $ 13K FOR INDO-INDIA
Handy
The Atlantic market is stable/flat with positive undertone meaning more enquiries hitting the market today. Lack of prompt vessels. Trips to ...
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- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Bhatia International Limited - India
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
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