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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, 29 November 11
DRY BULK MARKET BEGINS WEEK ON HIGHER NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Contrary to what had been the case during the past few weeks, this one began on a high note for the dry bulk market, with the Capesize sector pullin ...
Monday, 28 November 11
CITING CONTRACTS, MINING FIRMS ARE NOT PAYING ROYALTIES UNDER LAW - THE JAKARTA POST
The Jakarta Post reported that, when the 2009 Law on Minerals and Coal was endorsed, hopes that Indonesia could maximize its revenue from the minera ...
Monday, 28 November 11
NEW ENVIRONMENTAL MARINE REGULATIONS TO IMPACT SHIPPING IN 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
August of next year will see some major changes for marine navigation. It’s when the North American ECA will come into force, introducing a 1% ...
Sunday, 27 November 11
INDIA'S KPCL TO IMPORT 50 MMT OF COAL FOR 10 YEARS
COALspot.com - Karnataka Power Corporation Limited (KPCL) will buy 5 million metric tonnes of coal annually for 10 years starting from 2015.
In a ...
Saturday, 26 November 11
INDIAN PORTS ARE BECOME COAL STOCKPILES..!!
COALspot.com - The Indian coal stocks and power tariff situation is the hot topic among the world coal producers as well as Indian coal importers.&n ...
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- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
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- Posco Energy - South Korea
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
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- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
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- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
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- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
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- Economic Council, Georgia
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- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- GMR Energy Limited - India
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- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Australian Coal Association
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
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