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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, 28 April 11
BALTIC DRY INDEX NUDGES UP AFTER DAYS OF LOSSES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After consecutive falls, the dry bulk freight market, as followed through the Baltic Dry Index, finally caught a breather yesterday, with the BDI ma ...
Wednesday, 27 April 11
KEWESPO CALLS FOR 765KT OF THERMAL COAL
COALspot.com - South Korea's East-West Power Co's (KEWESPO) has issued a tender to buy total 765,000 tonnes of thermal coal for delivery between J ...
Wednesday, 27 April 11
HARUM ENERGY TO PAY RP 659.1B IN DIVIDENDS - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miner Harum Energy is planning to pay out Rp 659.1 billion (US$76.46 million) in dividends this year ...
Wednesday, 27 April 11
TSIS $5 MILLION PLANT TO START PRODUCING UPGRADED COAL - THE JAKARTA POST
The Jakartapost reported that, PT Total Sinergy International (TSI), in association with Agritrade Resources Limited of Hong Kong, will upgrade its ...
Wednesday, 27 April 11
RAIN CONSIDERS COAL MINES TAKEOVER - INSIDER STORIES
Indonesian's tenth largest coal miner in term of coal concession, PT Resource Alam Indonesia Tbk (KKGI), is considering to acquire several coalmine ...
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- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- PTC India Limited - India
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Planning Commission, India
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
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