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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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Sunday, 23 October 11
CHINA LOOKING TO RESELL INDONESIAN COAL CARGOES - BARCLAYS
Commodity Online reported that, Anecdotal evidence has suggested that China is even looking to resell Indonesian cargoes back into the seaborne coal ...
Saturday, 22 October 11
THE SHORT-PERIOD RATES FOR PANAMAX REMAINED FIRM - CAPT. REDDY
COALspot.com - "The market seemed to slow down a bit this week, and all sectors were down by about One to five percent", said Capt. Reddy, ...
Saturday, 22 October 11
WILL THE PROPOSED 26 PERCENT PROFIT SHARING CLAUSE IN THE MINING BILL SPEED UP THE PRODUCTION OR SCARE AWAY INVESTORS? - DIPESH DIPU
A draft law has been approved by a ministerial panel headed by Finance Minister Pranab Mukherjee of India which, if passed by the Cabinet, will make ...
Saturday, 22 October 11
INDONESIA'S GOLDEN ENERGY SLASHES ITS IPO PRICE - THE JAKARTA GLOBE
The Jakarta Globe reported that, Golden Energy Mines, a coal mining company affiliated with Sinar Mas Group, lowered its target in an initial public ...
Thursday, 20 October 11
CAPESIZE - TUBARAO /QINGDAO BEING FIXED AT STRONG US$ 29.75 PMT
Handy
The Atlantic market is quite steady, and market seems to be around the same levels as last week. Fewer fixtures reported though. ...
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- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- The University of Queensland
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- VISA Power Limited - India
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
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