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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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Sunday, 20 March 11
FREIGHT MARKETS COULD SOFTEN NEXT WEEK DUE TO JAPANESE PORTS CLOSURE AND LIBYAN CRISIS - VISTAAR
COALspot.com - The BDI was down by 1.98 pct (closing at 1531 points) mainly due to Cape index which was down by almost 11 pct and closed 1687 points ...
Friday, 18 March 11
FALL IN INDONESIAN COAL EXPORTS IN FEBRUARY 11
COALspot.com - Indonesian coal exports seen a fall of 10.76% during Feb 2011. The world’s largest coal exporter shipped 22.029 MMts of c ...
Thursday, 17 March 11
THE PACIFIC HANDY MARKET IS CURRENTLY STEADY - FEARNBULK
Handy
The Atlantic market is showing signs of recovery and does not seem to be affected by the Japan disaster. The market is very positional and i ...
Tuesday, 15 March 11
COAL PRODUCTION FORECAST TO SURGE ON RISING PRICES - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal production is forecast to increase by 20 percent this year as coal prices continue to ...
Monday, 14 March 11
IRON ORE TRADING WORLD EUROPE 2011
Press Release - Strategy and opportunity for miners, steelmakers, end users and the financial community.
The iron ore spot market is growing at a ...
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- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Minerals Council of Australia
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- The University of Queensland
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Bhatia International Limited - India
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- White Energy Company Limited
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
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