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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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Thursday, 08 September 11
PETROSEA ADDS US$730 MIO CONTRACT
Coal mining contractor PT Petrosea Tbk (PTRO), a majority owned subsidiary of energy integrated company PT Indika Energy Tbk (INDY), has secured a U ...
Wednesday, 07 September 11
ANOTHER EXCEPTIONALLY STRONG WEEK FOR THE CAPESIZE MARKET - BRS
The very strong rise in Cape rates pushed through an overall improvement in the BDI this week, although relatively little benefit from the Capes has ...
Wednesday, 07 September 11
INDIA HIT BY INDONESIAS COAL PRICE - TEMPO INTERACTIVE
TEMPO Interactive, an Indonesian online news portal reported that, The Indian government has complained about the price increase of Indonesian coal, ...
Wednesday, 07 September 11
SAMPUR POWER AGREEMENT SIGNED - DAILY NEWS
Daily News, Sri Lank's national news paper reported that, the agreement for the setting up of a 500 MW coal-fired power plant at Sampur, Trincomale ...
Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohm ...
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- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- The University of Queensland
- White Energy Company Limited
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Planning Commission, India
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
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