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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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Sunday, 25 December 11
THERMAL COAL PRICES GAINED UP TO 4.32 PERCENT
COALspot.com - globalCOAL index gained 4.32 percent to US$106.36 per ton in RBCT, benchmark for South Asia and West Europe markets, for the week end ...
Saturday, 24 December 11
CHINAS LEVEL OF GROWTH TO DETERMINE COURSE OF DRY BULK MARKET IN 2012 SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest report, shipbroker Intermodal attempted to find a silver lining in the tough year that was 2011, as well as what one could expect from ...
Friday, 23 December 11
SPOT PACIFIC CAPESIZE VESSELS HAVE COMMANDED HIGH PREMIUMS - FEARNLEYS
Handy
Rates in the Atlantic kept stable from last week, with a touch of negativity closer to the end. Less spot cargoes seen, and owners are ...
Friday, 23 December 11
CONTENTIOUS ISSUES IN CONTRACT RENEGOTIATION - THE JAKARTA POST
The government has been renegotiating mining contracts, especially those 30-40 years old, with almost all mining companies, including PT Freeport In ...
Friday, 23 December 11
LANCO JOINS HANDS WITH BUKIT ASAM FOR INDONESIAN POWER PROJECT
COALspot.com - PT Tambang Batubara Bukit Asam, Indonesia's state owned coal miner and Indian based Lanco Infratech Ltd plans to build steam power p ...
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- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- The University of Queensland
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- GMR Energy Limited - India
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
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