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