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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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Saturday, 26 March 11
ADARO AIMS TO DOUBLE COAL PRODUCTION -THE JAKARTA POST
The Jakarta Post reported that, coal producer PT Adaro Indonesia is planning to soon boost its production capacity to 80 million tons annually, almo ...
Friday, 25 March 11
KNOWLEDGE INFRASTRUCTURE TO BAG 160,000 MT COAL SUPPLY ORDER FROM TNPL
COALspot.com - Delhi based Knowledge infrastructure Systems Pvt. Ltd offered lowest price of US$ 97.10 per metric ton for calorific value of 6000 GA ...
Friday, 25 March 11
THE CAPESIZE MARKET CONTINUED TO FALL - FEARNBULK
Handy
The Atlantic market remains stable with more activity from the Black Sea to Feast paying in the mid 20´s on supras.
The USG remain ...
Friday, 25 March 11
BORNEO ENERGI FY10 NET INCOME SOARS - INSIDER STORIES
Coking coal producer PT Borneo Lumbung Energi Tbk (BORN) booked a skyrocket net income by 499.72% from net loss position in 2009, as quoted by Insid ...
Thursday, 24 March 11
INDIA'S CHETTINAD INTERNATIONAL COAL TERMINAL'S PERMISSIBLE DRAFT HAS INCREASED TO 13.5 M
COALspot.com - Chettinad International Coal Terminal in Ennore port has the berth with draft 13.5 Meters now, according to E-Mail statement received ...
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- Essar Steel Hazira Ltd - India
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- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
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- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
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- CIMB Investment Bank - Malaysia
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- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
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- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Planning Commission, India
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- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
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- White Energy Company Limited
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- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
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- Ministry of Transport, Egypt
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- New Zealand Coal & Carbon
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- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
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- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
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- Bahari Cakrawala Sebuku - Indonesia
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- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
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- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
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- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
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- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Australian Coal Association
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- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
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- Indian Energy Exchange, India
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- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
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- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
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- Thai Mozambique Logistica
- Parliament of New Zealand
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
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- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
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- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
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- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
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- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
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