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