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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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Sunday, 15 January 12
THE FREIGHT MARKET CONTINUED TO BLEED - VISTAAR
COALspot.com - "The markets continued to bleed with BDI touching almost 1000 points , almost reaching the collapse of 2008 levels," said C ...
Saturday, 14 January 12
GOLDEN MINES TO SUPPLY 4 MIO TONS - INSIDER STORIES
Insider Stories reported that, Coal miner under Sinarmas Group PT Golden Energy Mines Tbk (GEMS), a subsidiary of PT Dian Swastatika Sentosa Tbk (DS ...
Friday, 13 January 12
DIFFICULT START OF 2012 FOR DRY BULK MARKET SEEN HARD TO CHANGE IN THE COURSE OF THE YEAR, UNLESS DEMOLITION PICKS UP
The dry bulk market has been on a freefall this week after a rocky start to the new year. Yesterday, the BDI (Baltic Dry Index) the industry's benc ...
Thursday, 12 January 12
DRY BULK MARKET CRASHING AT START OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept being on freefall mode yesterday, with the industry's benchmark, the BDI (Baltic Dry Index) losing a massive 5.17% on ...
Wednesday, 11 January 12
NEWBUILDING ORDERS DECLINE, AS SHIP OWNERS REALIZE OVERSUPPLY WILL "KILL" THEM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With 2012 now underway, it will be rather interesting to see how ship owners will play the "newbuilding ordering" card to their favor, as ...
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- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Planning Commission, India
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- The University of Queensland
- Petron Corporation, Philippines
- Minerals Council of Australia
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
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