We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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
If you believe an article violates your rights or the rights of others, please contact us.
|
|
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 ...
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 ...
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 ...
|
|
|
Showing 4966 to 4970 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- White Energy Company Limited
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
|
| |
| |
|
