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Wednesday, 07 March 12
DRY BULK MARKET KEEPS UP TIMID REBOUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 The dry bulk market has kept its rising momentum yesterday, rising for the eighth straight session, on the back of renewed demand for smaller bulk carriers. As a result, the BDI (Baltic Dry Index), the industry’s benchmark, ended yesterday up by 0.64% to 787 points. Indeed, it was the smaller ship types which kept the market upwards yesterday, versus their larger counterparts which seemed to suffer from thinner demand. The Handysize segment rose by 1.36% according to the Baltic Exchange, while the Supramax one was the main gainer, with a daily increase of 2.6%. by contrast, the Capesize market was down by 0.46% to 1,516 points, while Panamaxes were also trading lower by 0.23% to 852 points.
Still, things are far from well, given the recent emergence of another negative catalyst factor for the future growth of freight rates, especially in the Capesize markets. More specifically, according to the China Iron Ore & Steel Association (CISA), China is aiming to improve its self efficiency in iron ore and continue to consolidate the steel industry in a bid to raise the output of its major steel makers by 10% within the next four years. The government expects the country’s top 10 steel manufacturers to account for 60% of the country’s steel output by 2015, Wang Xiaoqi, CISA vice chairman, said at a recent trade conference held in Beijing.
Meanwhile, according to BIMCO, dry bulk rates are set to remain suppressed during the next few weeks. Capesize Time Charter Average will remain under pressure and stay below $12,000 per day as tonnage oversupply has hit back at a time where demand is taking a small breather. Meanwhile, the report also forecasted that Panamax and Supramax freight rates are likely to develop rather flat and stay in the USD 7,000-13,000 per day interval. Handysize rates are expected to remain close to the operating break-even freight rate level at USD 6,000-8,000 per day interval.
According to BIMCO, “opportunities in the time charter market are gone for now and only the spot market remains in focus. As demand has dozed off, there is a return of pressure from the tonnage oversupply that must go away before rates will be supported by returning demand. Provided that iron ore spot prices will stay competitive/attractive as compared to the domestically mined ore within China, this should support demand, regardless of the level of stockpiles at Chinese ports and a stagnating steel price. But the lift will come in weeks rather than days.
One of the main events during 2012 will be the 19 Vale-connected +400,000 DWT VLOCs that are due for delivery. They come on top of the 5 VLOCs delivered in 2011 and another 125 new Capesize vessels that are going to be delivered in 2012. The “low” level of new Capesize deliveries comes after two mammoth years where 213 (2010) and 248 (2011) were launched and the easing inflow could be further potentially buoyed by another 60 Capesizes being demolished, assuming the 2011-standards for scrap-matured vessels are applied. Even with the extensive focus the VLOC’s have received, in the context of the sheer amount of VLOC-tonnage as a share of the total Capesize fleet, 5% remains minor.
The only seasonal factor that could support rates during the first quarter is thermal coal for heating in the northern hemisphere winter, including China. But pulling in the opposite direction is the structural overcapacity and the seasonal winter rains in Brazil and South Africa and cyclones on the west coast of Australia that delivered a significant blow to freight rates last January as massive amounts of cargo were cut off” said BIMCO in its analysis.
The organization’s Chief Shipping Analyst, Peter Sand also mentioned, that in terms of supply, «the biggest positive surprise of 2011 was the 22.2 million DWT of demolished tonnage. Of this, 67 were Capesize vessels sold for recycling primarily during the terrible first six months. Characteristics of the average Capesize vessel that left the fleet: 156,845 DWT, 27 years of age, recycled in Bangladesh at USD 509 per Ldt., leaving USD 11.5 million for the owner from taking the vessel out of active trading.
During 2011, an average of 8 million DWT was delivered into the market every single month. This was an unprecedentedly high number – something we hopefully won’t see again before the fleet is twice as big as today in 2034. If January deliveries are to give any indication into 2012, a level of little more than 6 million is relatively positive, as the pace is coming down from 2010-11. However, it’s still a historically very high level.
So far, the active fleet has grown by 1.0% in 2012, caused by delivery of 79 new vessels of 6.4 million DWT, offset by 1.6 million DWT being demolished. BIMCO expects total demolition in 2012 to come down from the 22.1 million DWT that was demolished during 2011 but to stay high, as freight rates are bound to keep pressure on earnings, pushing more over-aged tonnage over the edge. Total inflow of tonnage in 2012 is estimated to hit 78 million DWT, counterbalanced by higher than previously expected demolition of 19 million DWT.
Following the upward adjustment of the demolition potential the dry bulk fleet holds for 2012, the fleet is now set to grow a bit slower at 10% during 2012. As 2011 only saw 26 million DWT being contracted, which was the lowest level since 2002, BIMCO expects 2012 to provide more of the same on that front. Overcapacity bites – and whatever cash reserves are left from before the financial crisis broke in 2008 or leftovers from the surprisingly well 2010 is not expected to be spent on new build first installments. Not even the elevated Capesize earnings that we experienced during the 4th quarter of 2011 made owners call the shipyards to place new orders” stated Sand in his analysis.
Source: Nikos Roussanoglou, Hellenic Shipping
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Tuesday, 15 May 12
POTENTIAL BOOM OF CHINAS COAL IMPORTS COULD PROVIDE FURTHER SUPPORT TO DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been moving sideways during the past week with the industry’s benchmark, the Baltic Dry Index (BDI) losing 0.53% on th ...
Saturday, 12 May 12
THE SHIPPING MARKET IS UNLIKELY TO SEE A REBOUND ANYTIME SOON - VISTAAR SINGAPORE
COALspot.com - The BDI softened this week and it was down by 1.64 pct closing at 1,138 points.
The cape index was up by 2.41 pct closing at 1,61 ...
Friday, 11 May 12
POLITICAL CHANGES COULD LEAD TO TEMPORARY HALT IN SHIPPING INVESTMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The potential of changes of political leadership in many of the world’s leading economies could very well lead to significant shifts in the di ...
Thursday, 10 May 12
DRY BULK ERRATIC ON LACK OF DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept up its erratic behavior as it went down again during yesterday’s session, on a lack of direct guidance in terms o ...
Wednesday, 09 May 12
COAL INDIA SIGNS FSAS WITH 13 POWER UNITS SO FAR - PTI
Press Trust of India has reported that, coal India has so far entered into fuel supply pacts with 13 power units, including Reliance Power's Rosa P ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- The University of Queensland
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
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