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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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Friday, 09 March 12
SHIP OWNERS LOOKING TO CHINA FOR REVIVAL, WHILE THEY KEEP SELLING OLD SHIPS FOR SCRAP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With China’s economic policy plan for the future on every ship owner’s mind, at least those involved in the dry bulk industry, the lates ...
Thursday, 08 March 12
INDONESIA'S COAL SECTOR CAN BENEFIT FROM CLEARER REGULATIONS - FITCH RATINGS
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable ...
Thursday, 08 March 12
DRY BULK MARKET ON THE RISE; CHINAS COAL IMPORTS COULD INCREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on rising back to healthier levels yesterday, with the BDI (Baltic Dry Index) the industry’s benchmark, marking its 8 ...
Wednesday, 07 March 12
INDONESIA COAL BENCHMARK PRICE GAINS FOR SECOND MONTH
COALspot.com - Indonesia raised the monthly coal reference price for sales in March by 1.15 percent, the second increase since February.
The Mini ...
Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION
COALspot.com - Foreign holders of mining licenses in Indonesia have to divert 51% of their stakes to Indonesian government or domestic entitie ...
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- GMR Energy Limited - India
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Australian Coal Association
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- India Bulls Power Limited - India
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
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