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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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- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- PTC India Limited - India
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Planning Commission, India
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- The University of Queensland
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
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