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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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Monday, 19 December 11
PLN WILL NO LONGER BUY COAL FROM TRADERS
COALspot.com - Indonesia's state electricity company PT Perusahaan Listrik Negara will no longer allow traders to become their suppliers, said, its ...
Saturday, 17 December 11
THE FREIGHT MARKET SEEMS TO HAVE ALMOST BOTTOMED OUT AND MAY REMAIN STEADY AT THESE LEVELS CAPT REDDY
COALspot.com - The BDI and Cape index closed lower this week with BDI closing at 1,888 points (down by 1.76 pct) and Cape index at 3,572 points (dow ...
Friday, 16 December 11
DRY BULK MARKET LOSES TRACK ON CAPESIZE LOSSES, SHIP FINANCING REMAINS TROUBLESOME - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn’t manage to sustain earlier gains, losing track yesterday, on reduced Capesize demand and persisting troubles in smal ...
Thursday, 15 December 11
BERAU SEES INDIA AS POTENTIAL MARKET FOR LOW-CALORIE COAL - THE JAKARTA POST
The Jakarta Post reported that, Publicly listed coal mining company PT Berau Coal Energy (BRAU), the fifth largest coal producer in Indonesia, sees ...
Thursday, 15 December 11
PANAMAX HARDLY AFFECTED BY THE RECENT FIRMER TENDENCY FOR THE BIG SISTERS - FEARNBULK
Handy
The rates are more or less the same as last week. Continent/US Gulf fixing at tick below USD 10k and Gulf/Continent levels at USD 25k. Trips ...
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- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Minerals Council of Australia
- Wilmar Investment Holdings
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- The University of Queensland
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
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