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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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Saturday, 24 December 11
CHINAS LEVEL OF GROWTH TO DETERMINE COURSE OF DRY BULK MARKET IN 2012 SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest report, shipbroker Intermodal attempted to find a silver lining in the tough year that was 2011, as well as what one could expect from ...
Friday, 23 December 11
SPOT PACIFIC CAPESIZE VESSELS HAVE COMMANDED HIGH PREMIUMS - FEARNLEYS
Handy
Rates in the Atlantic kept stable from last week, with a touch of negativity closer to the end. Less spot cargoes seen, and owners are ...
Friday, 23 December 11
CONTENTIOUS ISSUES IN CONTRACT RENEGOTIATION - THE JAKARTA POST
The government has been renegotiating mining contracts, especially those 30-40 years old, with almost all mining companies, including PT Freeport In ...
Friday, 23 December 11
LANCO JOINS HANDS WITH BUKIT ASAM FOR INDONESIAN POWER PROJECT
COALspot.com - PT Tambang Batubara Bukit Asam, Indonesia's state owned coal miner and Indian based Lanco Infratech Ltd plans to build steam power p ...
Thursday, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
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- Central Java Power - Indonesia
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
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