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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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Friday, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
Thursday, 01 December 11
DRY BULK MARKET RISES TO NEW HEIGHTS ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on rising this week, with the industry’s benchmark, the Baltic Dry Index (BDI) climbing to 1,846 points on Wednes ...
Tuesday, 29 November 11
SOUTH AFRICAN COAL INTO CHINA, THE ACTIVITY WAS SLOW - BRS
Capesize
The Capesize market in Atlantic stayed pretty firm last week with transatlantic rounds being fixed in the high twenties. Sentiment was les ...
Tuesday, 29 November 11
GOLDEN GATE BRIDGE OF INDONESIA COLLAPSED AT KUKAR, EAST KALIMANTAN
COALspot.com - A suspension bridge in Indonesia’s east Kalimantan province over the Mahakam river collapsed on Saturday, killing at least elev ...
Tuesday, 29 November 11
BUKIT ASAM SCOUTS RP3 TRILLION PROFIT - INSIDER STORIES
The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above ...
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- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Economic Council, Georgia
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
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