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