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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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Monday, 19 December 11
PLN WILL NO LONGER BUY COAL FROM TRADERS
COALspot.com - Indonesia's state electricity company PT Perusahaan Listrik Negara will no longer allow traders to become their suppliers, said, its ...
Saturday, 17 December 11
THE FREIGHT MARKET SEEMS TO HAVE ALMOST BOTTOMED OUT AND MAY REMAIN STEADY AT THESE LEVELS CAPT REDDY
COALspot.com - The BDI and Cape index closed lower this week with BDI closing at 1,888 points (down by 1.76 pct) and Cape index at 3,572 points (dow ...
Friday, 16 December 11
DRY BULK MARKET LOSES TRACK ON CAPESIZE LOSSES, SHIP FINANCING REMAINS TROUBLESOME - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn’t manage to sustain earlier gains, losing track yesterday, on reduced Capesize demand and persisting troubles in smal ...
Thursday, 15 December 11
BERAU SEES INDIA AS POTENTIAL MARKET FOR LOW-CALORIE COAL - THE JAKARTA POST
The Jakarta Post reported that, Publicly listed coal mining company PT Berau Coal Energy (BRAU), the fifth largest coal producer in Indonesia, sees ...
Thursday, 15 December 11
PANAMAX HARDLY AFFECTED BY THE RECENT FIRMER TENDENCY FOR THE BIG SISTERS - FEARNBULK
Handy
The rates are more or less the same as last week. Continent/US Gulf fixing at tick below USD 10k and Gulf/Continent levels at USD 25k. Trips ...
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Showing 4926 to 4930 news of total 6871 |
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- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Bhatia International Limited - India
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- PTC India Limited - India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- White Energy Company Limited
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- The University of Queensland
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
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