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