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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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Sunday, 17 April 11
THE FREIGHT MARKET APPEARS WILL CONTINUE TO BE SOFT NEXT WEEK - CAPT. REDDY
COALspot.com - "The freight market continued to soften further with all segments down except for the handy size which was marginally up by 10 p ...
Sunday, 17 April 11
ADARO TO PROPOSE US$75 MILLION DIVIDEND
COALspot.com - One of Indonesia's largest coal miner PT Adaro Energy Tbk (ADRO) is keen to propose a final dividend of US$75 million or Rp 20.17 (U ...
Saturday, 16 April 11
TNPL RECEIVES 1.6MT OF COAL OFFERS - SOURCES
COALspot.com - Tamil Nadu Newsprint and Papers Ltd. has closed its 160,000 MT coal inquiry today.
More than a half a dozen of Indian coal t ...
Friday, 15 April 11
DRY BULK MARKET KEEPS ON FALLING, ON LOW DEMAND AND HIGH SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its falling patern this week, with the industry’s benchmark, the Baltic Dry Index (BDI) retreating again yesterda ...
Thursday, 14 April 11
SUPRAS IN N.CHINA GET CLOSE TO $12000 FOR TRIPS VIA INDONESIA TO INDIA - FEARNBULK
Handy
The Atlantic market remains flat - very little new/fresh business and slow activity. Considerable prompt tonnage remains unfixed. The USG pa ...
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- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
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- Ministry of Mines - Canada
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- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
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- LBH Netherlands Bv - Netherlands
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
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- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
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- The Treasury - Australian Government
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- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
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- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
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- Savvy Resources Ltd - HongKong
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- Georgia Ports Authority, United States
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- Edison Trading Spa - Italy
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- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
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- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
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- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
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- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Australian Coal Association
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- Planning Commission, India
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- Antam Resourcindo - Indonesia
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- Bangladesh Power Developement Board
- Videocon Industries ltd - India
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- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
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- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
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- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
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- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
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