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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, 23 September 11
UT TO PRODUCE 7 MMT OF COAL BY 2012
PT United Tractors Tbk is targeting a 7 million tons of coal production next year, a 55.55% increase from 4.5 millions targeted this year, said Pres ...
Friday, 23 September 11
RECORD RECYCLING ACTIVITY STIRS OPTIMISM IN DRY BULK SAYS BIMCOS ANALYSIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected at the start of the year, dry bulk ship owners were expected to flock scrapyards around the world, in order to take advantage of attract ...
Friday, 23 September 11
PANAMAX EXPERIENCED A SOFTENING IN RATES - FEARNLEYS AS
Handy
Still a good boost of fresh cargoes entering the market. Vessels in Black Sea with GOA clearance and Baltic positions are fetching tick abov ...
Wednesday, 21 September 11
INDIA'S COAL IMPORTS FROM INDONESIA FALL, CHINA BUYS MORE
COALspot.com - Indian coal imports from Indonesia fall to below 6 million tons in August, and this fall was continuing last few months. Ho ...
Wednesday, 21 September 11
2ND ANNUAL SHALE GAS SUMMIT
2nd Annual Shale Gas Summit 31 October – 3 November 2011 JW Marriott Hotel, Hong Kong
According to a recent EI ...
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- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- PTC India Limited - India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Australian Coal Association
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- GMR Energy Limited - India
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
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