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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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Friday, 30 September 11
INDIAN IRON ORE MARKET GETTING ACTIVE - FEARNLEYS AS
Handy
The Atlantic market continued its strong trend with fresh cargoes entering the market. Vessels open US Gulf fixed tick above US$ 27k back to t ...
Friday, 30 September 11
KRISHNAPATNAM PORT WINS GLOBAL PORT & COAL PORT OF THE YEAR AWARDS
COALspot.com - Krishnapatnam Port, a dynamic new generation world class port located in the East Coast of India has been adjudged the winner in the ...
Thursday, 29 September 11
INDONESIA'S MINERS FACE AN UNCERTAIN FUTURE - RUPERT WALKER
An evolving regulatory framework for the country's minerals industry could threaten its profitability and stifle investment.
The five-year surge ...
Thursday, 29 September 11
DRY BULK MARKET FALLS MID-WEEK, FURTHER DROP EXPECTED NEXT WEEK ON CHINA HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, as reflected by the Baltic Dry Index (BDI) retreated by 0.36% yesterday reaching 1,920 points, with the Capesize segment suffer ...
Wednesday, 28 September 11
ATLAS RESOURCES TO SELL 25% STAKE IN IPO - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, plans to sell 783.33 m ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- White Energy Company Limited
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Australian Coal Association
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- VISA Power Limited - India
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
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