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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, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
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- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Australian Coal Association
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Planning Commission, India
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Economic Council, Georgia
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
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