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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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Saturday, 15 October 11
BUNKER PRICES AND DEMANDS PUSHED FREIGHT RATES UP - VISTAAR
COALspot.com - The market continued to be firm with all segments moving up with biggest gain in Handy size segment up by 15 pct. The BDI was u ...
Saturday, 15 October 11
BENGAL COAL IMPORT TEST - THE TELEGRAPH
The Telegraph reported that, the power position in Bengal improved today but alarm bells are ringing over imported coal stocks that are running out ...
Friday, 14 October 11
CAPE DERIVATIVES MARKET HAS NOT REFLECTED OWNERS EXPECTATIONS' - FEARNBULK
Handy
The Atlantic market continued its upward trend, with fresh cargo entering the market. Skaw Passero to US Gulf climbed US$ 1500 from la ...
Friday, 14 October 11
ADARO BUYS SERVO MEDA FOR RP200 BIO - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) announced that its subsidiary PT Alam Tri Abadi (ATI), acquired 35% stake in PT Serv ...
Thursday, 13 October 11
DRY BULK MARKETS RALLY CONTINUES, BUT ANALYSTS WARN IT WILL BE SHORTLIVED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market continued its push forward yesterday, for yet another session, as the BDI (Baltic Dry Index), the industry’s benchmark edg ...
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- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- The University of Queensland
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Australian Coal Association
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
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