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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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Wednesday, 16 November 11
TAX OFFICE VOWS TO CRACK DOWN ON COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry’s Directorate General of Taxation says that it will strengthen its supervision of coal mi ...
Wednesday, 16 November 11
A STRONG WEEK FOR THE CAPES - BRS
A sharp bounce by the Cape market pushed the BDI up by 3% last week. This was despite a softening in the other indices with the Panamax, Supramax an ...
Monday, 14 November 11
BORL SEEKS 660K MT OF LOW SULPHUR COAL
COALspot.com - BORL India has issued a tender for around 660,000 MT of 4500 - 5500 kcal/kg sub-bituminous Coal.
Bharat Oman Refineries Ltd ...
Sunday, 13 November 11
BUNKER PRICES REMAINED FIRM
COALspot.com - The market seemed to recover this week with the BDI and Cape Index up.
The BDI was up by only about 2.86 pct closing at 1835 point ...
Saturday, 12 November 11
COALINDO ENERGY LAUNCHED INDEX FOR 3400 GAR COAL
COALspot.com - PT Coalindo Energy, in cooperation with Argus Media Limited, launched the coal index for low-rank coal with a calorific value of 3,40 ...
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- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Planning Commission, India
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
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