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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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Tuesday, 04 October 11
INDONESIA RAISES COAL BENCHMARK (HBA) FOR FIRST TIME IN 4 MONTHS
COALspot.com - Indonesia raised the monthly reference price for sales in October by 2.56 percent, the first increase since June.
The Ministry of ...
Tuesday, 04 October 11
COAL MINING GROUP WANTS EXPORT TAX, NOT EXCISE - JG
One of the leading English news paper in Indonesia, The Jakarta Globe reported that, the government shall reimpose a duty on coal exports, classifyi ...
Sunday, 02 October 11
INDIAN COAL IMPORTS PICKED UP - CAPT. REDDY
COALspot.com - The BDI dropped by 1 pct and Cape index dropped by 6 pct closing at 1,899 points and 3,136 points respectively. However all other seg ...
Saturday, 01 October 11
2012 TO BE ANOTHER CHALLENGING YEAR - CEO, REMI MARITIME
Shipowners are facing another challenging year in 2012 said Mr. Leonidas Polemis CEO of Remi Maritime Corporation, urging caution towards operating ...
Friday, 30 September 11
MINING BILL CLEARED, FIRMS TO SHARE 26% PROFITS WITH LOCALS - NDTV
NDTV reported that, The Union Cabinet cleared the draft mining bill aimed at regulating mining activities Friday. The bill proposes a profit-sharing ...
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- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- White Energy Company Limited
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Bhatia International Limited - India
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
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