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