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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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Wednesday, 26 October 11
PWCS GLOBAL SHIPPING BENCHMARKING ANALYSIS: RECOVERY IN 2010 BUT GREAT UNCERTAINLY FOR 2011
The recovery of global trade in 2010 to the same levels as 2008 led to an improvement in the overall performance of shipping companies in 2010 compa ...
Wednesday, 26 October 11
INDIAN MARKET WAS REMAINED TIGHT THE WHOLE LAST WEEK - BRS
The market once more seems to be at a crossroads. The indices last week remained fairly stable (except for the Panamax sector), ending the week as f ...
Tuesday, 25 October 11
DRY BULK MARKET STEADY, ANALYSTS LOOKING FOR ADDED PRESSURE ON THE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was unchanged on Monday, with the industry’s benchmark, the BDI (Baltic Dry Index) ending the session at 2,153 points, exa ...
Monday, 24 October 11
NEW HEAD OF INDONESIA'S MINING MINISTRY GETS RAKED OVER THE COALS - JOSEPH KIRSCHKE
COALspot.com - Following Indonesia’s presidential cabinet shakeup last week, many are questioning the qualifications of Energy and Mineral Res ...
Monday, 24 October 11
CHINA QINHUANGDAO COAL PRICE RISES TO HIGHEST IN THREE YEARS - BUSINESSWEEK
Business week reported that, China’s power-station coal price rose to the highest level in three years as power stations and central heating p ...
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- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- The University of Queensland
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
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