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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, 22 November 11
NTPC TO BUY 2 MMT OF IMPORTED COAL FOR ITS FOUR PLANTS
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, the largest thermal power generati ...
Tuesday, 22 November 11
ABM INVESTAMA SETS IPO AT RP 3,750
Insider Stories reported that, Integrated energy company PT ABM Investama Tbk has determined the IPO price at Rp3,750 (approximately US$ 0.415) per ...
Tuesday, 22 November 11
A SURPRISINGLY STRONG WEEK FOR THE CAPES - BRS
Positive gains for most of the segments this week, the exception being the Handysizes. Overall the BDI ended the week at 1,895 points (+3.3% week-on ...
Tuesday, 22 November 11
APPETITE FOR DRY BULK VESSELS SLOWS DOWN AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was down at the beginning of the week, as demand for Capesize vessels was particularly low. The industry’s benchmark, the ...
Monday, 21 November 11
CAPESIZES DRIVE MARKET LOWER, ANALYSTS DIVIDED ON DRY BULK OUTLOOK IN THE LONG RUN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market ended the week on a sour note, with the industry’s benchmark heading downwards to 1,895 points, which represented a slight ...
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- PTC India Limited - India
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- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
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- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
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- Samtan Co., Ltd - South Korea
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- Energy Development Corp, Philippines
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- Global Green Power PLC Corporation, Philippines
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- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
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- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
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- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
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- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Renaissance Capital - South Africa
- White Energy Company Limited
- Minerals Council of Australia
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
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- SMC Global Power, Philippines
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- Indonesian Coal Mining Association
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- Latin American Coal - Colombia
- Deloitte Consulting - India
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Indogreen Group - Indonesia
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- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
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- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Economic Council, Georgia
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
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- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
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