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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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Friday, 01 April 11
DRY BULK MARKET WEAKENS ON SLOWER DEMAND, HOPES FOR MID-TERM REBOUND ON JAPANS RECONSTRUCTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, as reflected in the Baltic Dry Index (BDI) retreated for a third day yesterday, after staying flat on Monday, to end at 1,530 p ...
Wednesday, 30 March 11
CHALLENGER SIGNS OPTION AGREEMENTS TO PURCHASE FOUR COAL PROJECTS IN INDONESIA
Challenger Signs Three Exclusive Option Agreements to Purchase Four Coal Projects in East Kalimantan, Indonesia
Challenger Deep Resources Corp.ha ...
Wednesday, 30 March 11
KPCL TO IMPORT ONE MILLION TONS OF 6300 GAD COAL
COALspot.com - Karnataka Power Corporation a state utility of Karnataka, India called for open tender for supply of one million tons of 6300 Kcal/kg ...
Wednesday, 30 March 11
WIKA GRABS PROJECT FROM ADARO INDONESIA - INSIDER STORIES
One of Indonesia's largest thermal coal PT Adaro Indonesia has finally mandated PT Wijaya Karya Tbk (WIKA) as a contractor to install and manage ov ...
Tuesday, 29 March 11
JAPAN FACTOR RIPPLING THROUGH THE SHIPPING MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the world watching the latest developments regarding the nuclear crisis in Japan and the devastating effects of the recent tragedy that struck ...
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- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- VISA Power Limited - India
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
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