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