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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, 27 September 11
A STRONG REBOUND FOR THE CAPE MARKET - BRS
A strong rebound for the Cape market, as cargoes continued to flow into the market and tonnage remained tight in the Atlantic, according to Barry Ro ...
Tuesday, 27 September 11
INTRACO SEALS US$25.3 MIO ORDER - INSIDER STORIES
Insider Stories reported that, Heavy equipment distributor PT Intraco Penta Tbk (INTA) obtained a US$25.3 million order on hand of heavy equipments ...
Sunday, 25 September 11
THE CHARTER RATES FOR INDONESIA TO INDIA WAS FIRM - VISTAAR
COALspot.com - The freight market moved up sharply with the cape Index up by 11 pct pushing the BDI by almost 6 pct and closing at 1,920 point ...
Saturday, 24 September 11
GOVT PLANS TO RENEGOTIATE ALL CONTRACTS INCLUDING FREEPORT - JP
The Jakarta Post reported that, the Energy and Mineral Resources Ministry has confirmed plans to renegotiate all mining contracts including those wi ...
Friday, 23 September 11
ICMA TO BUILD UPGRADE FACILITIES TO ANTICIPATE BAN ON LOW-GRADE COAL EXPORT BY 2014
COALspot.com - January to August of this year, Indonesia’s coal production had already reached 235 million tons. Earlier estimates had targete ...
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- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Deloitte Consulting - India
- The University of Queensland
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Planning Commission, India
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
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