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