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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, 08 November 11
COAL MINER ABM INVESTAMA PLANS $290M PUBLIC OFFERING - JG
The Jakarta Globe reported that, ABM Investama, an Indonesian coal miner controlled by the Hamami family, plans to raise as much as Rp 2.6 trillion ...
Monday, 07 November 11
CHINA'S COAL IMPORTS STEAM AHEAD
Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net ...
Saturday, 05 November 11
DEMAND SLUMP THREATENS MORE PAIN FOR BULK VESSELS - VISTAAR
COALspot.com - The market continued to fall with BDI dropping below 2,000 points by around 10 pct and closing at 1817 points. The cape index also co ...
Saturday, 05 November 11
BERAU STARTS TO EXPLORE BINUNGAN SITE - INSIDER STORIES
Insider Stories reported that, coal miner PT Berau Coal, a 90% owned subsidiary of PT Berau Coal Energy Tbk (BRAU), is busy to hold exploration in B ...
Friday, 04 November 11
INDIAN IRON ORE MARKET REMAINS DEAD - FEARNLEYS
Handy
The Atlantic market kept its strong position from last week. Even with fewer fixtures reported. Fronthauls still around 25k, wit ...
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- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Australian Coal Association
- Economic Council, Georgia
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
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