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Wednesday, 12 October 11
CAPESIZE FREIGHT RATES BOUND TO RETREAT FROM 2011 HIGHS ON THE BACK OF TONNAGE OVERSUPPLY SAYS BIMCO
 According to Nikos Roussanoglou, Hellenic Shipping, with the BDI (Baltic Dry Index) breaking yet another 2011 high yesterday and ending the session at 2,106 points, up by 3.64% on the day, dry bulk ship owners couldn’t be happier. But, as BIMCO’s senior analyst Peter Sand notes, this recent positive development is not rooted in an improved fundamental balance between supply and demand. Thus, it’s likely to see an easing of rates from current levels. “Despite the traditionally strong fourth quarter we estimate that the Capesize Time Charter Average will travel southbound from current highs towards the USD 15,000-20,000 per day as the tonnage oversupply is bound to rule again. Amongst the smaller ship sizes, Panamax and Supramax rates are likely to stay firm in the USD 14,000-18,000 per day. Handysize rates are expected in the USD 10,000-14,000 per day interval” said BIMCO.
The organization forecasts a total delivery of more than 90 million DWT of newbuild dry bulk vessels in 2011. “This will result in a fleet growth of over 14%. Deliveries are biased towards the larger segments, but so is scrapping of over-aged tonnage. It is also worth noticing that conversion of single-hull VLCCs into Very Large Ore Carriers for the last year this time around is expected to push up fleet growth by 3 million DWT.
China is on course to deliver iron ore demand growth of 10%, being more or less the single positive iron ore story in 2011. Regardless of the recent Bull Run in Capesize freight rates, second hand values have continuously leaked. This is supporting the argument of a temporary event. But as spot rates have picked up, so have short-term time charters. Six month time charter rates have doubled since the beginning of August while 1 year charter rates have jumped by 50%. The long end of the forward curve remains unaffected” said BIMCO in its analysis.
Demand-wise BIMCO’s Peter Sand said that “The positive development in Capesize freight rates seen since 22 August, when the USD 16,000 per day lid was blown off, also took the BIMCO Capesize time charter earnings forecast by surprise while the remaining segment earnings forecast were spot on. The Capesize segment has sprinted away from the rest of the field into a break-away that is still rolling. Freight rates for Capesize vessels started to rise on the back of stronger Chinese demand for coal and iron ore. As India is still a reluctant exporter of iron ore, stronger demand resulted in more tonnes-miles as Brazil and Australia pitched in as the swing-providers of this vital steel-ingredient to Chinese steel mills. This boosted Capesize demand at the expense of Supramax demand, which normally lifts Indian iron ore to China. Overall development on the dry bulk markets, as expressed by the BDI, has gained 413 index points since 22 August – equal to 27%.
Over the same period of time, Capesize earnings have gained 74% and this compares to moderate earning gains in the smaller segments. Last year, seaborne iron ore demand grew by 10.6% driven by resumed demand from Europe and Japan following the fall-out in 2009. In 2011, iron ore demand growth is seen only in China but as long as it maintains an insatiable iron ore hunger, Capesize vessels are hanging on. However, at a growth rate of just 6% expected in 2011, demand will be the poorest in the past 10 years. Total coal demand is set to grow by just 2% this year as compared to 15.9% in 2010. This does not bode well for overall Capesize demand as the fleet grew by 23% last year and is on course for 13.4% growth this year (depending on level of recycling, scrap steel demand and freight rate development). The current spike in freight rates, suggested to be due to strong Chinese demand for coal and iron ore in a combination with available tonnage imbalance between the basins, seems fundamentally difficult to maintain as overall available tonnage remains abundant” said BIMCO.
As far as supply goes “the active fleet has grown by 10.1% so far in 2011, caused by delivery of 64.2 million DWT, offset by 18.1 million DWT being demolished. According to BIMCO estimates, the fleet is about to grow by 14.5%, unless planned deliveries are postponed beyond what is already assumed.
“Demolition of older tonnage is estimated at 20 million DWT, but could go as high as 25 million if year-to-date demolition swiftness continues. However, the recent jump in Capesize earnings could prove “sufficient” to cool down the rush to the breakers. 55% of all demolished tonnage has originated from Capesize vessels and that has positively reduced the net fleet growth by 4.4% so far. The Capesize fleet would have grown by 20% in 2011 without any demolition activity at all, but holds now the potential of growth by just 13.4%.
The Handysize segment, which saw 6.7% of the fleet during 2009 and another 3.0% during 2010 being removed due to strong demolition, is once again enjoying a noteworthy amount of 2.5 million DWT scrapped so far in 2011 with a clear potential for more to come. While Handysize are currently scrapped at an average age of 33 years, Capesize vessels are broken up at an average age of 27 years. New orders continue to be placed at slower pace than new ships are delivered, bringing the orderbook down from 241 million DWT two months ago to 236.6 million DWT. The orderbook-to-fleet ratio remains very high at 40.5% as the active fleet has reached 583.8 million DWT. Put into perspective of the amount of new built tonnage delivered in previous years, 2011 represents Mount Everest and 2010-2013 deliveries the Himalaya mountain range” concluded the analysis.
Source: Nikos Roussanoglou, Hellenic Shipping
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Thursday, 03 November 11
DRY BULK MARKET OFFICIALLY IN THE RED ON LOWER CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept falling yesterday, on lower iron ore demand, which has caused the industry’s benchmark, the BDI (Baltic Dry Index) to ...
Wednesday, 02 November 11
MMTC TO BUY 3.73 MILLION TONS OF COAL FOR 2011- 2013
COALspot.com - India’s state-owned coal and mineral trader MMTC looking for 3.73 million tons of power plant coal for the period 2011 - 2012/ ...
Wednesday, 02 November 11
PANAMAX MARKET BECAME QUIETER AFTER THE RECENT RECOVERY - BRS
There were substantial losses across the board this week: the BDI lost 6.3% to end at 2,018 and the BCI 8.2% to end 3,274. In the smaller sizes the ...
Tuesday, 01 November 11
BORNEO LUMBUNG BUYS 23.8% INTEREST IN BUMI
COALspot.com - PT. Borneo Lumbung Energi (BORN), an Indonesian coking coal producer announces that it has signed a sale and purchase agreement, cond ...
Tuesday, 01 November 11
BAKRIE FORMS STRATEGIC PARTNERSHIP WITH BORNEO - REDUCING DEBT BY USD 1 BILLION
Press Release - Enhancing the standing of “Indonesia Inc.” at the London Stock Exchange PT Bakrie & Brothers Tbk (“BNBR” ...
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- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Planning Commission, India
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Australian Coal Association
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- The University of Queensland
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
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