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