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Friday, 23 September 11
RECORD RECYCLING ACTIVITY STIRS OPTIMISM IN DRY BULK SAYS BIMCOS ANALYSIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 As expected at the start of the year, dry bulk ship owners were expected to flock scrapyards around the world, in order to take advantage of attractive scrap prices and help alleviate tonnage oversupply pressures, already in place since the last months of 2010. With 2011 also looking to be another record-breaking year in terms of new building deliveries, scrapping of older vessels was crucial to the industry’s recovery. Well, after nine months, it seems that these efforts have paid off, with the dry bulk market staging a superb comeback since late summer.
According to BIMCO’s latest analysis, in absolute numbers, 2011 is expected to become the new no1 in terms of dry bulk tonnage leaving the fleet to be recycled. “On On course for more than 20 million DWT to be demolished, with the potential of reaching 25 million if owners continue to be attracted by the relatively high demolition rates and freight rates fail to improve significantly through the remainder of the year.
Chief Shipping analyst at BIMCO, Peter Sand says: “The huge amount of tonnage leaving the fleet for recycling is very positive news for the dry bulk market. As 2011 is going to provide the largest inflow of new ships ever, this counterbalancing effort by ship owners is softening the current imbalance between supply and demand as fleet growth will be tempered”.
The previous demolition record was set in 1986 when 12.9 million DWT was demo-lished. At that time the dry bulk fleet was comprised of just 197.2 million DWT, bringing the annual demolition rate to 6.5%. Should 2011 bring around the same annual demolition rate relatively, 35 million DWT would have to be recycled.
The primary driver behind this development is the fact that earnings have been close to OPEX-levels for most of the year. Combined with a strong inflow of new tonnage this has led to a strong surge in demolitions of older tonnage” said Mr. Sand.
BIMCO’s analysis continues: “The fleet growth rate in the Capesize segment has so far been tempered by 4.4% due to demolition, with the potential of reaching as much as 6.6% for the full year. This offsets the fleet growth to a large extent, since the absence of any demolition activity during 2011 would have resulted in the Capesize fleet growing by astonishing 20%. Massive as this figure may sound, the Capesize fleet grew by 23% last year and 18.5% in 2009. If the full potential of demolition of the Capesize fleet in 2011 should materialize, that would equal another 4.6 million DWT to be demolished. In order words it would require the 28 remaining Capesize vessels that are built in 1985 or before to exit the fleet.
The demolition activity has primarily involved Capesize vessels. 55% of the recycled DWT in 2011 represented Capesize vessels. This compares to the previous 10 years average at just 27% of total dry bulk demolition. As the Capesize segment has already seen inflow of new tonnage in excess of 27 million DWT (153 vessels), the decision to take a vessel out of the commercial service is helping to cushion the impact from significant oversupply which has already left deep scars in terms of very poor earnings. Average spot earnings for a 10 years old Capesize vessel in 2011 have been just USD 8,296 per day. This is the poorest result on record. Last year such a vessel earned USD 30,587 per day on average.
This means that, if you have so far traded your Capesize vessel exclusively in the spot market during 2011, earnings would have covered only daily running costs, regardless of the composition of your Capesize fleet (new/old, debt-free/indebted). This may be one of the most important factors behind the booming demolition activity as massive inflow of new tonnage doesn’t encourage higher demolition activity alone.
Daily running cost on a Capesize vessel today is around USD 8,000 per day excluding capital costs and depreciations. If you include the above mentioned costs in the earnings-equation the picture looks quite different and it really spells out the chal-lenges facing owners. If your new built and externally financed Capesize is bought at top dollar at the peak of the market (USD 95 million) using 80% debt at 5% p.a. you will need just above USD 30,000 per day to break-even with the vessel on a stand-alone basis. At the other end of the scale the same calculation equals a break-even rate at USD 19,000 per day if you invest in a 5 year old second hand vessel today at USD 39 million.
Owners of “V Europe” have just sold the vessel for USD 10 million to be demolished at a Bangladeshi facility. The vessel that was beached on August 30 is amongst the latest in a very steady stream of dry bulkers to be withdrawn from service. The 1982-built, 139,496 DWT vessel is the 58th in the line of Capesize bulk carriers, under-scoring the strong flow of vessels satisfying a very solid demand for scrap metal in the demolition country.
The healthy demand for scrap steel is visible from the high ldt-prices offered. “V Europe” went to the breakers for USD 525 per ldt (Light Displacement Tonnage), building further on the continual rise in prices offered by cash buyers.
There are four major ship recycling markets, namely India, Bangladesh, China and Pakistan. In all terms India is by far the largest ship breaking nation and Alang the leading facility. So far this year, 283 vessels with a cargo capacity of 8.9 million DWT have been scrapped by Indian breakers. Bangladesh comes in second in terms of DWT - 7.4 million and China in terms of numbers – 107 vessels of various kinds. The typical demolished Capesize vessel is 27 years old on average with a cargo capacity of 160,125 DWT and built in Japan (51%) between 1977 and 1991” concluded BIMCO.
“At the current demolition pace, 4.7% of the dry bulk fleet will be demolished during 2011. But as the order book still holds 235 million DWT in prospect for future delivery equal to 40% of current active fleet, – recycling of over-aged tonnage must remain at high volume to bring optimism back and steer this dry bulk segment towards more sustainable freight levels and thus better earnings“, adds Peter Sand.
Sorce: Nikos Roussanoglou, Hellenic Shipping
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Saturday, 17 September 11
GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE FOR US$ 1.26 BILLION
COALspot.com - GVK group, India’s leading infrastructure developer,confirmed arrangements for the acquisition of a strategic part of large, hi ...
Saturday, 17 September 11
INDIA'S GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE PROJECTS IN AUSTRALIA
COALspot.com - GVK group, India’s leading infrastructure developer, today confirmed arrangements for the acquisition of a strategic part of la ...
Friday, 16 September 11
DELTA DUNIA MAKMUR REMOVED 30.9 MILLION BCM OVERBURDEN IN AUGUST 2011
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 30.9 million bcm (+13.2% YoY) overburden in August 2011 while coal production was at 2.9 ...
Thursday, 15 September 11
RUSSIAN COAL EXPORTS UP 10.9% IN JAN-AUG TO 71.50 MILLION TONS - PORT NEWS / HELLENIC SHIPPING
Port News reported that, Coal exports from Russia in January-August 2011 grew by 10.9% compared with the same period last year, to 71.50 million ton ...
Thursday, 15 September 11
INDIAN GOVT PLANS TO DEVELOP 9 NEW MAJOR PORTS BY 2016 - INVEST MONEY / HELLENIC SHIPPING
The government has announced to make a investment of more than Rs 22,000 crore (approximately US$ 4,623,791,331) to develop nine new major ...
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- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- The University of Queensland
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
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