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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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Tuesday, 05 April 11
DRY BULK MARKET DOWN ON FIRST DAY OF SECOND QUARTER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market began the second quarter on a downward pattern, with the industry’s benchmark, the Baltic Dry Index (BDI) shedding 1.45 pe ...
Monday, 04 April 11
INDONESIA INTERNATIONAL CONFERENCE FOCUS ON INDONESIA'S ECONOMY (IICFIE) 2011 MASTER PLAN TO ACCELERATE THE ECONOMIC DEVELOPMENT
Press Release - Since couple of years, Indonesia's economy show impressive growth. What is the Indonesia's Economic Corridor and the Master plan t ...
Saturday, 02 April 11
TNPL CALLS FOR 160KT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure another 160,000 MT +/- 5 percent of Non-Coking imported C ...
Saturday, 02 April 11
THE FREIGHT MARKETS LIKELY TO BE SOFT NEXT WEEK - VISTAAR SINGAPORE
COALspot.com - The freight market softened this week affecting all sectors with BDI down by 65 points (down by 4.10 pct) and closed at 1,520 points. ...
Friday, 01 April 11
SUPRAS EX RICHARDS BAY COAL TERMINAL TO INDIA HOVERING AT $ 25 - 27.00 PMT - FEARNBULK
Handy
Atlantic markets remain stable with more activity from the Black Sea to FEast paying in the mid 20´s on Supras. The USG remains firm p ...
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- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Parliament of New Zealand
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Minerals Council of Australia
- PTC India Limited - India
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
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