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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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Tuesday, 13 December 11
CAPESIZES AND PANAMAXES LEAD DRY BULK MARKET HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched closer to the 2,000 mark on Monday, with Panamaxes rebounding firmly and leading the gains. As a result, the industry&rsq ...
Monday, 12 December 11
DRY BULK MARKET LOOKING FOR BALANCE AS WE ENTER 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
During the past few months, freight rates for dry bulk carriers, especially Capesizes have increased significantly, providing ship owners with a muc ...
Sunday, 11 December 11
THE PANAMAX INDEX ENDED ON POSITIVE DIRECTION - VISTAAR
COALspot.com - The BDI and Cape index continued the upward trend this week also with BDI up by 3.00 pct closing at 1,922 points and Cape index up by ...
Saturday, 10 December 11
MAHAKAM RIVER RESUMES COAL TRANSPORTATION
COALspot.com - East Kalimantan local government has resumed limited coal barging through Mahakam River after two weeks of suspension following the c ...
Friday, 09 December 11
DRY BULK MARKET REBOUNDS ON HEALTHIER DEMAND OUTLOOK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged forward yesterday, at the highest rate of the past couple of weeks, as a result of stonger iron ore demand, backed by lowe ...
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- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- PTC India Limited - India
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
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