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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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Sunday, 20 November 11
THE FREIGHT MARKETS EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The market continued to move up with all sectors gaining except for handy size.
The BDI was up by 3.26 pct and closed at 1895 poin ...
Friday, 18 November 11
MMTC SEEKS 1.365 MMT OF IMPORTED COAL
COALspot.com - India's MMTC, the largest trading company of India and a major trading company of Asia, has issued a term supply tender for 1.365Mt ...
Friday, 18 November 11
KPC, ARUTMIN OUTPUT REACHED 47.1 MIO TONS - INSIDER STORIES
PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, reported 47.1 million tons of coal production in 9M 2011, according to Indiser Stories.
Insi ...
Friday, 18 November 11
THE ATLANTIC SUPRAMAX MARKET EXPERIENCED A STEADY AND FIRM TENDENCY
Handy
The Atlantic Supramax market experienced a steady and firm tendency this week. Especially the North Atlantic and Mediterranean position ...
Friday, 18 November 11
BERAU COAL 9M PROFIT SOARS 194.46% - INSIDER STORIES
Insider Stories reported that, PT Berau Coal Energy Tbk (BRAU), which is 84.7% owned by Bumi Plc, reported a 194.46% jump in net profit by end of Se ...
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- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Economic Council, Georgia
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
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