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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 will eventually hit back.
Meanwhile, it reiterated its 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.According to BIMCO’s analysis “despite the the supply-side pressure, we put our money on black and forecast that Capesize rates are going to be supported by lower iron ore prices and coal demand for Winter heating in the coming months, thus we expect freight rates to stay sensitive to iron ore price developments but above USD 20,000 per day. A key observation from BIMCO is that we believe mining companies will prefer to sell this important steel production ingredient in larger volumes rather than higher prices, as long as China appears ready to purchase.
In order to deliver the support needed to keep rates elevated, Chinese iron ore imports will need a level of 61.2 million tonnes in both November and December, which in turn will bring the annual total import growth to +10% y-o-y. The supporting argument that must trump the negative impact from high stockpiles and slower steel production is the pricing game. China has built a firm reputation for playing the commodity markets well.
Looking beyond the Capesize fleet and into 2012, the smaller-in-size segments are going to experience a healthy slowdown in new deliveries. Right now, deliveries are estimated at 80 million DWT – equal to a fleet growth of 11.4%; a number that is likely to get slightly inflated by vessels that were set for December delivery but end up being January deliveries instead. A potential upside may also come from Russia, if they decide to impose a ban on grain exports to stop excessive outflow of the foodstuff. This will lead to longer hauls, as African and Middle Eastern importers will have to look for alternative sources potentially further away. Should they go to the most likely exporters, Australia or Argentina, the impact on the freight markets will be most significant” said BIMCO.
On the supply side, BIMCO’s Chief Shipping Analyst, Peter Sand said that the active fleet has grown by 12.9% so far in 2011, caused by delivery of 1,050 new vessels equal to 86 million DWT, offset by 20.9 million DWT being demolished. “We expect total demolition in 2011 to end at 23.5 million DWT as the activity is slowing down. Total inflow of tonnage in 2011 is going to hit 100 million DWT, surpassing 2010 inflow of new tonnage by as much as 20%. The fleet is about to grow by 14.5%, which is the highest level ever in net and gross terms.
By early December, 230 new Capesize vessels (+170,000 DWT) were delivered. That’s more than one new vessel every second day throughout the year. In total, BIMCO expects 245 new Capesizes will have been delivered in 2011 before New Year’s Eve. The projections for next year anticipates delivery of another 220 new Capesizes. Strong inflow of new tonnage and high amounts of recycled tonnage have brought the average age of the Capesize fleet down to 11.5 years from 13 at the start of the year. The level of new contracts dropped month by month as the year passed by. From close to 5 million DWT contracted in January, only 0.8 million DWT was contracted in October. This is a 29-months’ low level – an extremely positive development that bodes well for this segment of the industry, especially when seen in the perspective of the rise in freight rates during the past few months and owners not queuing up to place new orders” said Sand.
Just two months ago BIMCO released an analysis entitled: “Record recycling activity stirs optimism in dry bulk”. By that time, the potential of reaching 25 million DWT was within reach if high demolition rates were kept attractive to owners and rates did not improve significantly. Today, the “bull run” towards the recycling yards is over, demolition rates have come down in the Far East and Bangladesh has stopped taking in more new business. Meanwhile, average freight rates have stayed more or less unchanged, near year-high levels, making demolition activity cool down significantly.
On the demand side, BIMCO said that “while the workhorses in the Panamax and Supramax segments performed in line with the BIMCO forecast – hovering around USD 15,000 per day – Handysize vessels performed slightly worse than expected, tipping their toes just South of the USD 10,000 per day. On the very positive side, Capesize rates tackled the dip at end-October to see rates soaring again in November. The development is driven purely by vessels chartered to haul iron ore to China. Coming down from 28 chartered ships a week by mid-October, weekly activity dropped to 11 per week by the end of October, due to falling steel prices. However, activity rebounded strongly throughout November as iron ore prices fell rather significantly too to offset the negative impact from falling steel prices, according to Commodore Research. This development is mirrored perfectly in average time charter rates.
Export prospects for Russian wheat are still strong and building. This is evident from recent very strong sales following solid demand for vast volumes and competitively priced wheat, despite appreciation of the Rouble against other currencies. However, there are concerns arising in the wake of the success that Russia will impose grain export restrictions should total grain exports reach 24 million tons. In an attempt to export before restrictions are imposed, traders and producers are shipping a lot of output to ports, creating railway jams. Ironically, these jams lowered the pace of exports in October.
The Panamax and Supramax rates in the Atlantic basin have found only little support in the wheat and grains coming into the market via the US Gulf. Rates have come off over the past months, but should firm slowly as demand for thermal coal picks up as we head into the Winter in the northern hemisphere.
Overall demand in 2011 is likely to end at 6% y-o-y, while demand growth in 2012 is looking a bit softer at 4% y-o-y” concluded BIMCO.
Source: Nikos Roussanoglou, Hellenic Shipping
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Thursday, 05 January 12
DRY BULK MARKET TAKES A PLUNGE OF LOW ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was widely expected the first days of the new year are characterized by significantly low chartering across the board of the dry bulk market, pus ...
Wednesday, 04 January 12
NEWBUILDING ORDERS PICKED UP IN 2011, BUT 2012 EXPECTED TO BE A DIFFERENT STORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) starting the year on a sour note, losing 114 points and ending yesterday’s session, the first of the new year, ...
Wednesday, 04 January 12
MAHAGENCO TO IMPORT LOW MOISTURE COAL
COALspot.com - Maharashtra State Power Generation Co. Ltd. is the state power generation utility owned by Government of Maharashtra, intends to proc ...
Tuesday, 03 January 12
INDONESIA COAL REFERENCE PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the January 2012 coal reference price at US$ 109.29 per ton or US$ 3.3 ...
Tuesday, 03 January 12
WHICH WAY WILL THE DRY BULK MARKET HEAD ON FIRST WEEK OF THE YEAR? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Dry bulk ship owners will be wondering which way will the BDI (Baltic Dry Index), the industry’s benchmark, will head during the first days of ...
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- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
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