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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, 08 March 11
US$ 8 BILLION WORTH OF INFRASTRUCTURE PROJECTS IN PIPELINE IN INDONESIA - WOOD MACKENZIE
India’s Increasing Demand for Thermal Coal Cannot Be Satisfied Without Emerging Coal Areas in Indonesia - Wood Mackenzie
At Coa ...
Tuesday, 08 March 11
INDIA'S VEDANTA TO ACQUIRE COAL MINES IN OVERSEAS
COALspot.com - India's Vedanta group is also looking at long-term off take agreements and possible acquire of coal mines overseas, the official sai ...
Tuesday, 08 March 11
MINERS SAY VALUE-ADDED LAW WILL HURT IN THE LONG RUN - THE JAKARTA GLOBE
The Jakarta Globe reported that, Government plans to require miners to give added value to their exported commodities could end up costing the count ...
Tuesday, 08 March 11
THE PANAMAX MARKET THIS WEEK FIRMED UP - BRS
Underlining the unpredictability of the current market, rates for all dry bulk segments swung up again last week. Stronger exports out of South Amer ...
Sunday, 06 March 11
THE S6 ROUTE MAY CONTINUE TO BE FIRM - VISTAAR
COALspot.com - The freight market was firm this week with all indices up. The BDI , Cape Index and Panamax index was up by almost 9 pct where as Sup ...
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- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- White Energy Company Limited
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Australian Coal Association
- Planning Commission, India
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Bangladesh Power Developement Board
- The University of Queensland
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
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