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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, 10 April 11
SOFT FREIGHT MARKET TREND LIKELY TO BE CONTINUED - VISTAAR SHIPPING
COALspot.com - The freight market continued to soften further with the BDI breaking the 1,500 points and closing at 1376 points down by almost 10 pc ...
Thursday, 07 April 11
HANDY RATES SLIDING NOW - FEARNBULK
Handy
Slowly softening rates as more tonnage is accumulating in the Atlantic basin.The trans-Atlantic round is around $15k pd with trips to ...
Thursday, 07 April 11
DRY BULK MARKET PLUNGING EVEN FURTHER ON LOW CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has continued its falling pattern this week, with every day proving to be painful for ship owners, especially those of the large ...
Thursday, 07 April 11
INDIKA BUYS MITRABAHTERA AT US$ 0.183
PT Indika Energy Tbk (INDY), integrated energy company, today has exercised an option agreement to acquire 51% shareholding in newly listed coal tug ...
Wednesday, 06 April 11
FORBES & MANHATTAN COAL ANNOUNCES SIGNIFICANT OFF TAKE AGREEMENT
Steady Cash Flow Will Fund Production Ramp Up
Forbes & Manhattan Coal Corp., ("Forbes Coal" or the "Company") is a produc ...
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- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Indika Energy - Indonesia
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Australian Coal Association
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
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