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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, 12 October 11
INDONESIAS COAL RUSH - JOSEPH KIRSCHKE
COALspot.com - Last winter, the Chinese government mobilized thousands of soldiers and reservists of the People’s Liberation Army to the port ...
Wednesday, 12 October 11
CAPESIZE - A SURPRISE JUMP IN RATES - BRS
There was a surge across all sizes last week, resulting in the BDI gaining 101 points to end the week at 2,000 points (+5.3%). The BCI reached 3,218 ...
Tuesday, 11 October 11
GLENCORE, SUITOR FOR BUMI PLC? - INSIDER STORIES
Insider Stories reported that, the largest commodities trader in the world, Glencore International Plc, is considering an opportunity to acquire a m ...
Tuesday, 11 October 11
RENUKA COALINDO BUYS JAMBI COAL
PT Renuka Coalindo Tbk, formerly PT Allbond Makmur Usaha Tbk plans to acquire PT Jambi Prima Coal holder of mining concession in Pauh, Sa ...
Monday, 10 October 11
MOZAMBIQUE CHANNEL TO BE THE NEW PIRACY HOTSPOT FOR THIS YEAR SAYS MARITIME SECURITY EXPERT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Mozambique Channel, as well as the entrance to the Persian Gulf, are expected to become some of the new pirate hotspots for piracy, says Richard ...
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- PTC India Limited - India
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Bhatia International Limited - India
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- The University of Queensland
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
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