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