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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, 05 May 11
PANAMAXES LEAD DRY BULK MARKET TO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s benchmark, the Baltic Dry Index (BDI) managed to edge higher yesterday, rising by 1.81% to 1,292 points, in the first po ...
Thursday, 05 May 11
AKR NAMES KARUNIA AS COAL CONTRACTOR
Insider Stories reported that, PT AKR Corporindo Tbk has appointed PT Karunia Bumi Khatulistiwa as the contractor of coal mining concession in North ...
Tuesday, 03 May 11
DRY BULK MARKET OUTLOOK SEEN WEAK, AS SHIP OWNERS PILE UP MORE SHIPS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the Baltic Dry Index not trading yesterday, it’s worth taking a step back to see the current freight levels. First of all, capesizes and ...
Tuesday, 03 May 11
THE HANDY MARKET CONTINUED TO SLIDE DOWN - BRS
There were marginal increases in rates for the larger sizes this week, with the Cape index remaining stable and the Panamax index logging a 5% incre ...
Monday, 02 May 11
ADARO POSTS 11.7 PERCENT INCREASE IN REVENUES ON HIGHER PRICES - THE JAKARTA POST
The Jakarta Post reported that, Indonesia’s second-largest coal producer, PT Adaro Energy Tbk, announced an 11.7 percent increase in net reven ...
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- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
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