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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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Thursday, 06 October 11
SOUTH EAST ASIAS AGGRESSIVE POWER DEMAND GROWTH WILL REQUIRE INVESTMENT OF US$125 BN BY 2020 - WOOD MACKENZIE
COALspot.com - Wood Mackenzie says that South East Asia’s demand growth for new power generation is so aggressive that new power generation in ...
Thursday, 06 October 11
CHINESE DEMAND FOR COAL IMPORTS TO MODERATE IN 2012 - MISWIN MAHESH
COALspot.com - We expect Chinese demand growth for imported steam coal to moderate over the next year. Steam coal imports into China will modera ...
Wednesday, 05 October 11
MINISTRY STICKING TO RAW COMMODITY EXPORT BAN DESPITE INDUSTRY FEARS - JG
The Jakarta Globe, the one of the leading English news paper in Indonesia, reported that, the details of a controversial new regulation that would b ...
Wednesday, 05 October 11
ATLANTIC AND PACIFIC BASINS BECAME TIGHTER FOR PANAMAX LAST WEEK - BRS
A slump for both the Capes and Panamaxes sent the BDI down 1% this week, falling to 1,899 points.
The Capes saw the greatest movement, sliding - ...
Wednesday, 05 October 11
WITH CHINA ON HOLIDAY, DRY BULK MARKET REMAINS STAGNANT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has remained to healthy levels after last month’s rally, but with China going on holiday this week, things are looking sta ...
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- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- The University of Queensland
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Planning Commission, India
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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