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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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Friday, 28 October 11
RISING COAL PRICES TO WORSEN CHINA'S WINTER POWER CRUNCH - CRI ENGLISH
CRI English reported that, the rising price of coal is fueling concerns about a power crunch set to plague China this winter, analysts said.
The ...
Thursday, 27 October 11
CAPESIZE REACHING NEW HIGHS - FEARNLEYS
Handy
Pacific market has mixed sentiments with tonnages fixed at firm levels and some tonnages in feast failing on subs.For indo-india, large eco ...
Thursday, 27 October 11
DRY BULK MARKET EDGES DOWN AS CHINAS IRON ORE DEMAND LOSES GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A plunge in Chinese iron ore demand, as a result of high steel inventories and a bleak outlook regarding steel prices, has prompted the dry bulk mar ...
Thursday, 27 October 11
BUKIT ASAM 3Q PROFIT SURGES 66.91%
Insider Stories reported that, the state-controlled coal miner PT Bukit Asam Tbk (PTBA) experienced a 66.91% increase in its net profit during a per ...
Wednesday, 26 October 11
MOODYS SEES MORE GROWTH FOR INDONESIAN COAL MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal mining industry looks set to grow despite an uncertain global economic outlook, according to ...
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- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Australian Coal Association
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
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