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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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Thursday, 27 October 11
CAPESIZE REACHING NEW HIGHS - FEARNLEYS
Handy
Pacific market has mixed sentiments with tonnages fixed at firm levels and some tonnages in feast failing on subs.For indo-india, large eco ...
Thursday, 27 October 11
DRY BULK MARKET EDGES DOWN AS CHINAS IRON ORE DEMAND LOSES GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A plunge in Chinese iron ore demand, as a result of high steel inventories and a bleak outlook regarding steel prices, has prompted the dry bulk mar ...
Thursday, 27 October 11
BUKIT ASAM 3Q PROFIT SURGES 66.91%
Insider Stories reported that, the state-controlled coal miner PT Bukit Asam Tbk (PTBA) experienced a 66.91% increase in its net profit during a per ...
Wednesday, 26 October 11
MOODYS SEES MORE GROWTH FOR INDONESIAN COAL MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal mining industry looks set to grow despite an uncertain global economic outlook, according to ...
Wednesday, 26 October 11
PWCS GLOBAL SHIPPING BENCHMARKING ANALYSIS: RECOVERY IN 2010 BUT GREAT UNCERTAINLY FOR 2011
The recovery of global trade in 2010 to the same levels as 2008 led to an improvement in the overall performance of shipping companies in 2010 compa ...
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- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
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