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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, 17 November 11
KOMIPO INVITES BIDS FOR 500K MT OF COAL
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids for the supply of 500,000 Metric Tons of minimum 5700 kcal/kg coal of NAR bases ...
Thursday, 17 November 11
INDONESIAN GOVERNMENT PLANS TO ISSUE MORATORIUM ON COAL MINING LICENSE
COALspot.com - Energy and mineral resources ministry is plans to issue a moratorium on the issuance of coal mining licenses, after the anti-graft co ...
Wednesday, 16 November 11
KRISHNAPATNAM PORT BECOMES DEEPEST DRAFT PORT IN INDIA
COALspot.com - Krishnapatnam Port in its quest to be the best port in India has increased its draft to 17.5 meters, according to E-Mail statement fr ...
Wednesday, 16 November 11
CHINA'S INDONESIA COAL IMPORTS RISE IN OCTOBER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31,162,688 MT of coal in October 2011.
China was a largest importer of Indonesi ...
Wednesday, 16 November 11
TAX OFFICE VOWS TO CRACK DOWN ON COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry’s Directorate General of Taxation says that it will strengthen its supervision of coal mi ...
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- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Australian Coal Association
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
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