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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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Thursday, 27 October 11
CAPESIZE REACHING NEW HIGHS - FEARNLEYS
Handy
Pacific market has mixed sentiments with tonnages fixed at firm levels and some tonnages in feast failing on subs.For indo-india, large eco ...
Thursday, 27 October 11
DRY BULK MARKET EDGES DOWN AS CHINAS IRON ORE DEMAND LOSES GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A plunge in Chinese iron ore demand, as a result of high steel inventories and a bleak outlook regarding steel prices, has prompted the dry bulk mar ...
Thursday, 27 October 11
BUKIT ASAM 3Q PROFIT SURGES 66.91%
Insider Stories reported that, the state-controlled coal miner PT Bukit Asam Tbk (PTBA) experienced a 66.91% increase in its net profit during a per ...
Wednesday, 26 October 11
MOODYS SEES MORE GROWTH FOR INDONESIAN COAL MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal mining industry looks set to grow despite an uncertain global economic outlook, according to ...
Wednesday, 26 October 11
PWCS GLOBAL SHIPPING BENCHMARKING ANALYSIS: RECOVERY IN 2010 BUT GREAT UNCERTAINLY FOR 2011
The recovery of global trade in 2010 to the same levels as 2008 led to an improvement in the overall performance of shipping companies in 2010 compa ...
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- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
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- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
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- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
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- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
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- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
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- Thiess Contractors Indonesia
- Australian Coal Association
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
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- Ministry of Mines - Canada
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- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Planning Commission, India
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Economic Council, Georgia
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
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