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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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Wednesday, 26 October 11
INDIAN MARKET WAS REMAINED TIGHT THE WHOLE LAST WEEK - BRS
The market once more seems to be at a crossroads. The indices last week remained fairly stable (except for the Panamax sector), ending the week as f ...
Tuesday, 25 October 11
DRY BULK MARKET STEADY, ANALYSTS LOOKING FOR ADDED PRESSURE ON THE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was unchanged on Monday, with the industry’s benchmark, the BDI (Baltic Dry Index) ending the session at 2,153 points, exa ...
Monday, 24 October 11
NEW HEAD OF INDONESIA'S MINING MINISTRY GETS RAKED OVER THE COALS - JOSEPH KIRSCHKE
COALspot.com - Following Indonesia’s presidential cabinet shakeup last week, many are questioning the qualifications of Energy and Mineral Res ...
Monday, 24 October 11
CHINA QINHUANGDAO COAL PRICE RISES TO HIGHEST IN THREE YEARS - BUSINESSWEEK
Business week reported that, China’s power-station coal price rose to the highest level in three years as power stations and central heating p ...
Monday, 24 October 11
CAPESIZE RENTAL RATES RISE FOR THIRD DAY AS MORE SHIPS HIRED - HELLENIC SHIPPING
Rates to hire capesize vessels advanced for a third day on signs of increased demand to transport iron ore, used to make steel.Daily rates for the s ...
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- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- The University of Queensland
- Renaissance Capital - South Africa
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Australian Coal Association
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
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