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Monday, 09 January 12
2012: WHAT WILL IT BRING FOR THE DRY BULK MARKET? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 A further increase in dry bulk demand could be the remedy for most of the industry's oversupply issues, together of course with the high level of scrapping activity, as observed during the course of 2011. According to the latest BIMCO report on 2012, a large part of this increase in demand could come from India and its coal needs. The report said that "the year 2011 had barely started before a series of unforeseen events took place across the globe. Most of them affected dry bulk shipping negatively and the large Capesize vessels were particularly under pressure. Amongst the events were the flooding in Australia and South Africa, the triple disaster in Japan and the “Arab Spring” that also affected the supply of oil into Europe.
Half a year down the road, during which many Capesize vessels had earned less than any other dry bulk vessel size, the unexpected happened again. Strong demand for iron ore and coal from China and the recovering Japan, sourced from Brazil and Australia, ignited freight rates for Capesize vessels. A tight tonnage situation in the Atlantic basin combined with increased congestion in loading and discharging ports pushed average rates above USD 30,000 per day.
A far cry from the peaks of the super cycle, but surely an indication of the peak levels we have in sight for the near- to mid-term future as the supply side remains a considerable burden for the industry. The demand side is set to be relatively stable in 2012 although it’s likely to grow somewhat slower than in 2011 – at least in volume terms. Overall iron ore demand is likely to slow. Still, a lower world market price as compared to the domestic costs of mining it within China holds the key to provide positive demand shocks for this valuable steel ingredient. Growing demand for thermal coal from large Asian consumers is said to be a steady demand driver" said BIMCO.
In a separate research report on the outlook of the dry bulk industry, DVB Bank said that the current dry bulk fleet now stands at 8,877 vessels (585.1mio dwt). The average age of the fleet is about 12 years and 59.1% of the fleet is less than 10 years of age. In addition, the average age of vessels less than 10 years old is merely 2.8 years – a very young fleet. Similarly, the orderbook stands at 2,371 vessels (196.3mio dwt) which equates to 33.6% of the current fleet. In dwt terms, large Capes constitute the largest portion of the current fleet while Panamax size vessels have the largest Orderbook. ULBC size range is expanding substantially. So far, three of the 34 Vale ULBCs of 400K+ dwt have delivered.DVB Bank said in its analysis that if the remaining 31 vessels actually deliver, this will have a huge negative impact on all large Cape asset values as well as T/C rates and impact earnings of other Sub-Sectors as well.
Looking at deliveries, a total of 366 vessels of 28.3 million dwt are still headed towards delivery, according to figures up to November of 2011. These vessels represent 14.4% of the orderbook. Given that for the most part these weren't expected to be delivered within 2011, the researcher said that they will be rolled over to 2012. So, it draws the conclusion that "even Even with 40% delays due to slippage, postponement and cancellation, we are poised to cross the 100mio dwt mark this year. In 2012, some 1,431 vessels (121.6mio dwt) are scheduled for delivery, which is about 62% of the current orderbook" said DVB Bank.
In total the dry bulk cargo demand is forecast to rise to approximatly 3.7 billion tons this year. But, as DVB states, the level of the orderbook is too much for it to be absorbed without problems and downward pressure both on ship values and freight rates. "Although scrapping picked up in 2011 to 21.4mio dwt (334 vessels) as of November, this figure is merely 3.5% of the existing fleet" said DVB Bank. It concluded that the vessels which were ordered at the peak of the market back in 2007-2008 should add to distressed asset sales, as their owners won't be able to repay them without huge losses. In essence, the researcher said that the current slowdown will see many ship owners out of the market and bankrupt, due to cash flow problems, as at the moment, they don't have the necessary cash reserves to survive the downturn, like they did back in 2008.
BIMCO's advice towards dry bulk ship owners they should expect the unexpected, as has been the lesson learned. "Maybe even India will begin to influence the market as a significant importer. This would fulfil the prophecy and release a vast potential that has been simmering for a very long time and provide a much-needed second major demand driver. Supplementing China as the dominant factor in the market would create a more sustainable freight market going forward. However, this will not happen in just one year; moreover it appears destined to remain a long and dusty road for several years to come. An optimist would surely name India as the best thing that could happen to the dry bulk shipping industry. In the meantime volatile iron ore exports and strong demand for thermal coal is likely to characterise India’s contribution to the dry bulk markets" concluded the organization.
Source: Nikos Roussanoglou, Hellenic Shipping
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Tuesday, 01 November 11
DRY BULK MARKETS CORRECTION SPILLS OVER ONTO NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is losing steam, as evidenced by the falls experienced last week, which were also apparent at the beginning of the new week. A l ...
Monday, 31 October 11
CHINAS HUNGER FOR INDONESIAN COAL AT THREE YEAR-HIGH AS WINTER NEARS - JOSEPH KIRSCHKE
COALspot.com - Chinese demand for power-station coal from Indonesia has soared to its highest level in three years, as central heating plants and po ...
Saturday, 29 October 11
ATLAS RESOURCES SEALS US$95 MIO LOAN - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, has secured US$95 mill ...
Saturday, 29 October 11
INDONESIA TO INDIA FREIGHT LIKELY TO REMAIN SOFT
COALspot.com - The market continued to slow down and all segment were down this week.
The biggest drop was in the Cape Index down by 8.19 pct&nbs ...
Friday, 28 October 11
RISING COAL PRICES TO WORSEN CHINA'S WINTER POWER CRUNCH - CRI ENGLISH
CRI English reported that, the rising price of coal is fueling concerns about a power crunch set to plague China this winter, analysts said.
The ...
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- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- The University of Queensland
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- PTC India Limited - India
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
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