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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 much needed boost. Still, the oversupply haven't been solved overnight. This will take a few more years to happen, provided that newbuilding orders remain at modest levels and scrapping of older ones doesn't seize.In an interview with Hellenic Shipping News Worldwide, BIMCO's
Chief Shipping Analyst, Peter Sand said that for the coming couple of months, BIMCO holds the view that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day. but the tonnage oversupply will eventually hit back. "Meanwhile, we reiterate our forecast on the Panamax and Supramax freight rates that are likely to stay put in the USD 13,000-17,000 per day interval. Handysize rates are expected to gain traction and return to the USD 9,000-13,000 per day interval" said Sand.He went to add that 2012 is likely to become as challenging as 2011. The pressure from the supply-side is set to ease a bit and drift down to around 11-12% but unfortunately the demand-side also looks set to end on the softer side of 2011.
Looking back in 2011, how would you describe this year in terms of dry bulk freight rates and the general movement of the industry’s benchmark, the BDI (Baltic Dry Index)?
Following the positive surprise that the industry experienced during 2010, 2011 have been very different. The combination of several demand-side disruptions and a freak wave of new built tonnage entering the fleet, has made the BDI drop by a significant 44% y-o-y. The fact that the amount of tonnage that went to the breakers was double-up on our initial forecast helped a lot, but cannot prevent the overall fleet to grow by 14%.
The year has been full of surprises. I’ll guess only very few had foreseen the main events of 2011 before they actually happened. The “Arab spring”, the massive flooding in Australia and South Africa and the triple disaster in Japan all events that was affecting dry bulk as well as wet bulk to a large extent. The Capesize segment was mostly hurt. During the first half of year, average time charter earnings of USD 8,500 per day only just covered OPEX for most vessels, leaving nothing to pay financial costs. But after a bit of a summer lull for Capesizes, freight rates really took off in August when China resumed massive buying of iron ore at a time when tonnage was tight in Atlantic basin. Congestion in both exporting and importing ports went up and lifted rates to year-high level where they are still hovering. The fact that the freight rate today is close to USD 30,000 per day is a positive surprise too – framing a year full of surprises and ending it on a happy note.
How is the current balance between demand and supply being shapen up?
The winter market is providing some support to the markets – and when you look at rates for Panamax and Handymax at USD 15,000 per day it actually not that bad when you look at it from a historical perspective. Trouble is of course that the fleet that ploughs the seas today is purchased at relatively higher prices than ever before – requiring higher rates to break even – when taking account of financing costs on top of ordinary OPEX.
For the coming couple of months, BIMCO holds the view that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply will eventually hit back. Meanwhile, we reiterate our forecast on the Panamax and Supramax freight rates that are likely to stay put in the USD 13,000-17,000 per day interval. Handysize rates are expected to gain traction and return to the USD 9,000-13,000 per day interval.
Despite struggling rates for the most part of the year, 2011 also saw a lot of newbuilding orders for dry bulk carriers. Which factors triggered this development?
From a fundamental point of view – the amount of tonnage that has been ordered during 2011 is sustainable; if you look at 2011 in solitude. Tonnage equivalent to 4% of the active fleet is a more or less what is required to renew a fleet that has a lifetime of 25 years. Moreover it is actually the lowest level of new orders placed since 2002, surpassing even 2009 where 35.6 million DWT was ordered. However, the problem is that 2010-2013 are all years of massive inflow of new tonnage. In order to get the balance back we should have a couple of years with deliveries below the sustainable trend to let demand catch up and balance the market once again.
It seems that 2011 was a record year for demolition activity of older vessels. Would things be a lot worse, shouldn’t those vessels had been sold for scrap?
The amount of demolished tonnage during 2011 has been a much welcomed wonder. And it has certainly provided some relief to the markets, mostly in the larger segments and specifically amongst Capesizes. The pressure on these big ships in particular has been eased by this. A few numbers illustrates this very clearly. The number of Capesize scrapped during 2011 (approx. 68) is equal to the number of Capesize vessels being scrapped during the preceding ten years! In the case that no Capesizes had been recycled the segment would have grown by more than 20% - matching the level of 2009 and 2010. But the demolition activity has cut growth by some 5%.
Do you expect a similar record of demolitions in 2012 as well, or is this dependant upon market swings?
Since freight rates took off in the Capesize segment by mid-August, only few vessels have been sold for recycling. The correlation between freight rates and the amount of recycled tonnage is quite strong right now. BIMCO do not foresee the record from this year to be duplicated in 2012. Our forecast for 2012 is that 10 million DWT is going to leave the fleet by demolition. But the estimate contains a pure upside potential, if rates are facing heat to the tune of first-half of 2011.
Going forward into 2012, do you expect newbuilding deliveries to outpace demand again, or will things slow down versus 2011?
In BIMCO we foresee that 2012 is likely to become as challenging as 2011. The pressure from the supply-side is set to ease a bit and drift down to around 11-12% but unfortunately the demand-side also looks set to end on the softer side of 2011. This leave the present fundamental imbalance between supply and demand more or less all-square – but as the global economy is still in a very fragile condition that now also means that China is slowing down, most risk are probably to be found on the downside.
Which will be the average rates for dry bulk ship types in 2012, according to your view and why?
We see 2012 is likely to become another 2011 on average. As China and India is going to grow a tad slower in the coming year this is like to limit the upside risk to our scenario. The global economic situation must be resolved before demand can surprise on the upside to a large extent. The yards will probably set 80 million DWT of to sea during the year – but handling the supply side remains an internal job. Use a variety of tools from the toolbox: slow steam, postpone/delay delivery, sign only new orders to a very limited extent, focus on customers and work closely together with all your stakeholders.
Source: Nikos Roussanoglou, Hellenic Shipping
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Thursday, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest research note, BIMCO said that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply w ...
Wednesday, 14 December 11
MINER TOBA BARA SEJAHTRA PLANS IPO IN 1ST HALF OF 2012 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Coal miner Toba Bara Sejahtra is aiming high next year, hoping to capitalize on renewed bullish sentiment in the lo ...
Wednesday, 14 December 11
TIMAH PLANS TO BOOST ITS COAL PRODUCTION TO TWO MILLION TONS PER ANNUM - SOURCES
COALspot.com - Timah plans to boost its coal production to two million tons per annum. The company also expects to acquire coal concession with mini ...
Wednesday, 14 December 11
BORNEO RESOURCE INVESTMENTS LTD. FINALIZES ACQUISITION OF INTEGRA PRIMA
COALspot.com - Borneo Resource Investments Ltd., announced that it has finalized the acquisition of an additional 1,300 hectare coal mining concessi ...
Tuesday, 13 December 11
BERAU COAL SCOUTS US$1.61 BIO SALES - INSIDER STORIES
Insider Stories reported that, coal mining company PT Berau Coal Energy Tbk (BRAU), that is 85% owned by London-listed company Bumi Plc, estimates a ...
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- Krishnapatnam Port Company Ltd. - India
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- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- White Energy Company Limited
- Indian Oil Corporation Limited
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
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- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Eastern Coal Council - USA
- Posco Energy - South Korea
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Planning Commission, India
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
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