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