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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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Saturday, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
Friday, 25 November 11
DISPUTE BETWEEN GIANT MINING FIRMS ENDS IN LAHAT - THE JAKARTA POST
The Jakarta Post reported that, prolonged dispute taking place in the South Sumatra regency of Lahat and involving two giant mining companies PT Buk ...
Friday, 25 November 11
DRY BULK MARKET LOSING STEAM, FAST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s been a week of falls for the dry bulk market this one, leaving ship owners with a sour taste in their mouths, as evidence of a recovery i ...
Thursday, 24 November 11
INDONESIA/INDIA SPMX TC AROUND $ 7/8K AND AROUND $ 12/13.00 PMTS ON VOYAGE BASIS - FEARNLEYS
Handy
Last week ended on a positive note in the Atlantic however the activity levels are somewhat reduced. Owners are asking in excess of USD ...
Thursday, 24 November 11
DRY BULK MARKET KEEPS LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was lower once again on Wednesday, with the industry’s benchmark, the Baltic Dry Index (BDI) ending the session down by 1. ...
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- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- White Energy Company Limited
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
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