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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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Saturday, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
Friday, 25 November 11
DISPUTE BETWEEN GIANT MINING FIRMS ENDS IN LAHAT - THE JAKARTA POST
The Jakarta Post reported that, prolonged dispute taking place in the South Sumatra regency of Lahat and involving two giant mining companies PT Buk ...
Friday, 25 November 11
DRY BULK MARKET LOSING STEAM, FAST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s been a week of falls for the dry bulk market this one, leaving ship owners with a sour taste in their mouths, as evidence of a recovery i ...
Thursday, 24 November 11
INDONESIA/INDIA SPMX TC AROUND $ 7/8K AND AROUND $ 12/13.00 PMTS ON VOYAGE BASIS - FEARNLEYS
Handy
Last week ended on a positive note in the Atlantic however the activity levels are somewhat reduced. Owners are asking in excess of USD ...
Thursday, 24 November 11
DRY BULK MARKET KEEPS LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was lower once again on Wednesday, with the industry’s benchmark, the Baltic Dry Index (BDI) ending the session down by 1. ...
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- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Deloitte Consulting - India
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- White Energy Company Limited
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Australian Coal Association
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
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