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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 fall of 0.16%. Capesizes were the main drivers of this trend, with the market falling by 0.71%. Still, the rest of the market segments were higher, with Panamaxes leading the pack, with an increase of 1.38%. In a recent report, consultant analysts PriceWaterHouseCoopers (PwC) said that the size of the Capesize fleet is forecast to rocket over the next three years at the same time as demand growth for seaborne iron ore is set to stagnate. In its report ‘Dry Bulk Shipping - Capes of no Hope?’, PwC said that there are currently 1,200 Capesize vessels worldwide at a value of $45billion but it is estimated that a further 450 more are on order over the next three years which will flood the market. While some of these orders may be delayed or cancelled, the global order book implies there will be rapid growth in seaborne transport of iron ore and coal, the main commodities carried by Capesizes.
David Smith, Assistant Director, PwC Strategy said that "as in other sectors of the shipping industry, dry bulk market participants are assuming that the next decade will look very much like the last in terms of patterns of trade flow growth. This has led to continued orders of new vessels on the assumption that Chinese demand for iron ore will continue to grow rapidly, but our estimates show that growth will be much lower in the future. The reality is that the ‘expected’ growth demand for iron ore is unlikely to materialise given the already high rate of infrastructure investment in China. This will leave a substantially increased number of vessels chasing a broadly unchanged level of cargo, with negative implications for rates. The situation, he added, will be exacerbated by the vessel building programmes being undertaken by the large mining companies. This will decrease the amount of cargo available on the spot market, at a time when the fleet is increasing dramatically, said Mr. Smith.
He went on to mention that "while rates in the Capesize sector have improved over the last three months, we see this as a temporary respite. Continued overcapacity is likely to push rates back towards operating costs, creating significant pressure for owners trading in the spot market.” “The worry, he said, is that these pressures will not be confined to the ship owning community. Low rates over a prolonged period will make it difficult for ship owners to keep up payments to the banks which have made substantial investments in the sector. Major sources of shipping finance include the UK, Germany, Greece, and Scandinavia, with UK banks alone having loans of over $50bn to the shipping sector” concluded Mr. Smith.
Meanwhile, in a separate report, shipowner Golden Ocean said that “most analysts agree that the dry bulk market does not have a demand problem. Iron ore and coal imports to China and coal imports to India are expected to grow at a steady pace over the next 5 years. A lot of new iron ore capacity will enter the market from 2013 onwards, which could put a downward pressure on international iron prices. This should support the freight market due to expensive, low quality Chinese iron ore production. However, the order book for the remainder of this year and 2012 is still a major concern and is the main reason why the forward freight assessment (FFA) is in backwardation.Despite the positive development in the freight market, asset values dropped further during third quarter. A five year old Capesize was priced at $39 million while a newbuilding resale was priced at approximately $50 million. There is a lot of uncertainty related to asset values going forward, but we observe that more forecasters state that they see limited downside” said Golden Ocean.
Analyzing the trade patterns noted during the third quarter, the company mentioned that “the third quarter of 2011 was yet another quarter which surpassed most analysts’ expectations. Given the large order book with record high deliveries both this year and next, it has been difficult to imagine a demand scenario which was able to cope with supply growth and maintain utilization at levels giving owners of dry bulk tonnage decent returns. Capesizes experienced a steady rise from bleak levels. Iron ore is the main commodity carried by Capesizes and China increased its import by more than 17 percent compared to same quarter previous year. Coal imports to China increased by almost 30 percent year-onyear.
In addition, other Asian countries contributed to the strong demand growth. Korea increased its iron ore imports by more than 20 percent and the rebuilding of Japan after the March 2011 earthquake and tsunami also contributed positively. These high growth numbers alone are still not sufficient to explain a utilization rate, which averaged 85 percent last quarter. Congestion remains as a positive factor for owners and between six to eight percent of vessel capacity was tied up in the third quarter” said Golden Ocean.
It further mentioned that “Chinese coastal trade increased by 17 percent during the third quarter and more than 300 million tons of dry bulk commodities was carried off the Chinese coast. On an annual basis, this represents 20 million dwt capacity. We have not seen the same focus on slow steaming in dry bulk as in other segments. However, analysis shows that average speed of the sailing fleet has dropped by more than two knots since 2008. This is not due to an effort to improve market conditions but rather a function of high bunker prices and optimizing earnings. Still, the focus has to be on the order book. So far this year approximately 205 vessels in the Capesize segment have been delivered, but at the same time almost 70 vessels of the same size have been scrapped. Delivery ratio compared to the official order book remains below 70 percent” concluded Golden Ocean.
Source: Nikos Roussanoglou, Hellenic Shipping
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Wednesday, 02 November 11
MMTC TO BUY 3.73 MILLION TONS OF COAL FOR 2011- 2013
COALspot.com - India’s state-owned coal and mineral trader MMTC looking for 3.73 million tons of power plant coal for the period 2011 - 2012/ ...
Wednesday, 02 November 11
PANAMAX MARKET BECAME QUIETER AFTER THE RECENT RECOVERY - BRS
There were substantial losses across the board this week: the BDI lost 6.3% to end at 2,018 and the BCI 8.2% to end 3,274. In the smaller sizes the ...
Tuesday, 01 November 11
BORNEO LUMBUNG BUYS 23.8% INTEREST IN BUMI
COALspot.com - PT. Borneo Lumbung Energi (BORN), an Indonesian coking coal producer announces that it has signed a sale and purchase agreement, cond ...
Tuesday, 01 November 11
BAKRIE FORMS STRATEGIC PARTNERSHIP WITH BORNEO - REDUCING DEBT BY USD 1 BILLION
Press Release - Enhancing the standing of “Indonesia Inc.” at the London Stock Exchange PT Bakrie & Brothers Tbk (“BNBR” ...
Tuesday, 01 November 11
ATLAS RESOURCES SETS IPO AT RP1,500 - INSIDER STORIES
Insider Stories reported that, coal miner PT Atlas Resources Tbk has set its initial public offering (IPO) at Rp1,500 (approximately US$ 0.169) per ...
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- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Planning Commission, India
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
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