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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, 22 November 11
NTPC TO BUY 2 MMT OF IMPORTED COAL FOR ITS FOUR PLANTS
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, the largest thermal power generati ...
Tuesday, 22 November 11
ABM INVESTAMA SETS IPO AT RP 3,750
Insider Stories reported that, Integrated energy company PT ABM Investama Tbk has determined the IPO price at Rp3,750 (approximately US$ 0.415) per ...
Tuesday, 22 November 11
A SURPRISINGLY STRONG WEEK FOR THE CAPES - BRS
Positive gains for most of the segments this week, the exception being the Handysizes. Overall the BDI ended the week at 1,895 points (+3.3% week-on ...
Tuesday, 22 November 11
APPETITE FOR DRY BULK VESSELS SLOWS DOWN AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was down at the beginning of the week, as demand for Capesize vessels was particularly low. The industry’s benchmark, the ...
Sunday, 20 November 11
THE FREIGHT MARKETS EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The market continued to move up with all sectors gaining except for handy size.
The BDI was up by 3.26 pct and closed at 1895 poin ...
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- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Parliament of New Zealand
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- The University of Queensland
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
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