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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, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest research note, BIMCO said that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply w ...
Wednesday, 14 December 11
MINER TOBA BARA SEJAHTRA PLANS IPO IN 1ST HALF OF 2012 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Coal miner Toba Bara Sejahtra is aiming high next year, hoping to capitalize on renewed bullish sentiment in the lo ...
Wednesday, 14 December 11
TIMAH PLANS TO BOOST ITS COAL PRODUCTION TO TWO MILLION TONS PER ANNUM - SOURCES
COALspot.com - Timah plans to boost its coal production to two million tons per annum. The company also expects to acquire coal concession with mini ...
Wednesday, 14 December 11
BORNEO RESOURCE INVESTMENTS LTD. FINALIZES ACQUISITION OF INTEGRA PRIMA
COALspot.com - Borneo Resource Investments Ltd., announced that it has finalized the acquisition of an additional 1,300 hectare coal mining concessi ...
Tuesday, 13 December 11
BERAU COAL SCOUTS US$1.61 BIO SALES - INSIDER STORIES
Insider Stories reported that, coal mining company PT Berau Coal Energy Tbk (BRAU), that is 85% owned by London-listed company Bumi Plc, estimates a ...
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- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Central Electricity Authority - India
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Australian Coal Association
- Minerals Council of Australia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
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