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