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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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- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Central Electricity Authority - India
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
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