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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, 29 March 11
DUTY EXEMPTION UNLIKELY TO IMPACT COKING COAL PRICES - PTI NEWS
Press Trust of India News reported that, the exemption to certain types of coking coal from customs duty is not likely to impact steel prices at pre ...
Monday, 28 March 11
HARUM ENERGY FY10 EARNING UP 7.23% - INSIDER STORIES
Thermal coal producer PT Harum Energy Tbk (HRUM), controlled by Indonesian businessman Kiki Barki through his son Lawrence Barki, posted a slight in ...
Monday, 28 March 11
IBT RAISES CAPACITY OF PULAU LAUT TERMINAL - THE JAKARTA POST
The Jakarta Post reported that, coal infrastructure and logistics firm PT Indonesia Bulk Terminal (IBT), a subsidiary of PT Adaro Energy Tbk, plans ...
Saturday, 26 March 11
THE FREIGHT MARKET REMAINED A BIT VOLATILE THIS WEEK - CAPT. REDDY
COALspot.com - "The freight market remained a bit volatile this week", says Capt. Reddy, director of Vistaar Shipping Singapore.
Howeve ...
Saturday, 26 March 11
FLSMIDTH WINS MULTIMILLION DOLLAR MATERIAL HANDLING PROJECT IN INDONESIA
FLSmidth has signed a contract in Jakarta worth in excess of USD 135m (DKK 700m) with PT Adaro Indonesia, a subsidiary of PT Adaro Energy Tbk., to s ...
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- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Mjunction Services Limited - India
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