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