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Tuesday, 04 September 12
SHIP OWNERS' COMPETITION LEADS TO TANKER FIXTURES BELOW OPERATING COSTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 Ship owners operating in the VLCC tanker markets are increasingly finding it difficult to obtain even breakeven rates for their vessels, as competition has intensified. In its latest weekly report, Braemar Seascope noted that the willingness of owners to continue the trend of fixing their vessels at below operating costs, means that they are in essence paying for the pleasure of transportation for their clients. "By offering this service they are also increasing their maintenance costs, and it seems that for one reason or another, the "layup" option seems to have been taken off the table. There are a few owners who have said they are unwilling to fix at these levels. However, unfortunately for the three or four who refuse to trade, there are five or six who are willing to accept the prevailing levels. Owners have been adjusting ballast speeds to super-slow and other money saving methods, but this seems to be perpetuating the trend" said the report.
It added that "this week has seen charterers fixing steadily, drip feeding the market. Most cargoes have attracted offers until a full complement of 8-10 has been received and rates of previously done or lower have been concluded. Even in the face of rising bunker prices, PG/West has remained at 280kt x ws23.0 via Cape and in some cases, ws22.0 via Suez. This highlights the fact that fixing via the Suez Canal is a huge saving on bunker costs.
West Africa has been mirroring the PG. Rates are very low and flat at 260kt x ws36.0-37.0 for W Africa/East. W Africa/West has not really been traded as a very depressed Suezmax market has been able to fulfil requirements. From Indian charterers ex-W Africa this week, IOC entered the market for W Africa/EC India off 27-28 September. Charterers took advantage of the continuing pressure being put on rates in this region by the eastern ballasters, and fixed the business at just a whisker under the US$3.0m mark. With the September programme ex-W Africa completed, the Indian charterers are now awaiting the laycans for their early October stems, which we expect to see firm by mid next week. We are assessing W Africa/WC India at US$2.75m and W Africa/WC India at US$3.0m.
The 30 day availability index shows 53 VLCCs arriving at Fujairah, of which five are over 15 years old, compared to last week’s total of 55. So far for September we have seen 59 VLCC fixtures reported from PG, compared with a total of 116 for August. Despite resistance from those owners unwilling to trade, those willing to continue to conclude business at present freight levels are more than sufficient to satisfy charterers’ requirements. It remains to be seen how sustainable present freight levels and daily earnings can be" Braemar concluded on the VLCC markets.
SUEZMAX
Meanwhile, in the Suezmax front this week, the report noted that "the West Africa market maintained reasonable levels of activity without inspiring a noticeable improvement in rates. Cargoes have been taken on by owners rapidly, and the lack of resistance has led to rates mirroring those from last week. West Africa / US Gulf still sits at ws55.0 with the standard 2.5pt mark-up to US Atlantic Coast & UKCont-Med. Whilst most of the early vessels have been accounted for, the 2nd decade of September is overloaded and will soak up any imminent demand. With cargoes entering 3rd decade dates, this does not provide much promise for those owners who have been sitting tight. Unfortunately, with the Mediterranean not offering much respite, it looks like many of those owners across the Atlantic who can make these dates will opt to ballast into the West Africa region and perpetuate or even undercut current rates.
In the Mediterranean, despite a few eastbound cargoes fixing, activity has been low. Voyages to the Far East have been achieving US$2.9m to US$3.0m, with a trip to India fetching US$2.2m. Cross-Med fixtures have been scarce with a short Arzew / Lavera 130kt x ws65.0, offering little perspective on the actual market. Worryingly a Mediterranean –US Gulf run was fixed at just ws47.5. In the Black Sea, a couple of charterers have been active, with a market rate of 140kt x ws55.0 meeting little resistance from either party, and toward the end of the week ws52.5 was fixed to the US Gulf. Whilst the odd fixture east should have lightened the load, the position list is so bloated that realistic owners will want to fix and get out of the market as soon as they can, so eastern runs should be attractive.
Towards the end of last week several cargoes were open in the PG, but these have been whittled down. After last week's enthusiastic climb to ws75.0 PG/West, the crippling effect of a fixture at ws55.0 has continued, with ws52.5 and ws50.0 fixed. There has been flat activity going east, but enough to back up last week's estimation that this market has some legs. 118kt x ws79.0 to East Coast India might not be a great indication of the market, but 130kt x ws77.0 to Vadinar was backed up by 126kt x ws87.0 to West Coast India and hopefully the reasonable levels of activity will relieve the position list and support the market for PG-West fixtures" said Braemar.
AFRAMAX
Finally, in the Aframax market, the company's report said that "with a short fixing week following the UK Bank holiday, general activity has been marginally better than the previous two weeks. However, rates in the Baltic remain unchanged with the market still over tonnaged and demand quieter as expected in the month of August. TD17 remains flat at 100kt x ws60.0 and we expect no change looking in to next week. Cargoes from the ports of Primorsk and Ust-Luga are currently fixing in the 10-15 September window. North Sea demand has been more or less non-existent with TD7 rates also flat at 80kt x ws85.0. In the Mediterranean and Black Sea, it has been a very quiet week again. Compared to the available tonnage, enquiry has been minimal. Owners are accepting in the region of 80kt x ws77.5 for cross Med voyages, and from the Black Sea 80kt x ws79.0, which we estimate is close to breaking even in terms of earnings.
Currently, there is a Black Sea market quote, and with plenty of prompt ships spot in the Black Sea meaning ballast is minimised, we expect a few more points to be shaved off. At present, there are no signs of any improvements in the eyes of the owners. Further west in the Caribbean, with both the Amuay Bay refinery fire and hurricane "Isaac" causing some uncertainty and delays, one would have expected freight rates to move upwards on the back of it. Rates did firm slightly since this time last week to currently 70kt x ws95.0, however the Amuay Bay failed to have much impact and hurricane "Isaac" is not expected to have a lengthy impact. This of course, does not help the market or owners, but many will be pleased that hurricane "Isaac" is not expected to cause the same devastation as hurricane "Katrina" did seven years ago. Looking in to next week, we would expect the market to remain at current levels. It has been an exciting week in the PG with lots of action seen compared to previous weeks. PG/East rates are moving upwards to ws115.0 due to an influx of cargoes in the market, causing the availability of tonnage to thin down. Consequently, owner sentiment has remained bullish.
Indonesia/North Asia rates have softened to ws87.5 due to the current typhoon situation, where charterers are carefully withholding their requirements to avoid vessels missing their dates. Not much change to TD14 this week, with rates firming at ws90.0, providing a TCE of around US$5,700/day. Fixing volume out of NW Shelf to North Asia has been fairly light. Sustainability in rates is highly unlikely as activity slows and the tonnage list lengthens" Braemar concluded.
Source: Nikos Roussanoglou, Hellenic Shipping
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Friday, 28 September 12
DRY BULK SECOND HAND VESSELS ON HIGH DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the demise of the dry bulk market and the collapse of freight rates since the beginning of 2012, on the back of record breaking newbuilding ...
Thursday, 27 September 12
MINING RE-COMMENCES AT ORPHEUS' B2 EAST KALIMANTAN COAL PROJECT
- B2 project overburden removal completed and coal exposed
- Coal getting has commenced with target production of 30,000tpm
- Orpheus to re ...
Thursday, 27 September 12
HANDY: THE PACIFIC MARKET IS GETTING WEAKER WITH UPCOMING GOLDEN WEEK HOLIDAYS - FEARNLEYS AS
Handy
Yet another week with rates softening in all trades. Especially owners with ships open Continent struggle to find employment paying decent mo ...
Thursday, 27 September 12
DRY BULK MARKET LOSES STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The rise of the BDI (Baltic Dry Index), the dry bulk industry’s benchmark during the course of the previous week, proved to be short-lived, as ...
Wednesday, 26 September 12
NEWBUILDING ORDERING ACTIVITY REMAINS SUBDUED ON GLOBAL MARKET UNCERTAINTY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding ordering activity has been on the down side during the past few weeks, a trend also noticeable during the course of the past few days, a ...
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- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Minerals Council of Australia
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
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