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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, 18 October 11
INDONESIAN PRESIDENT APPOINTS JERO WACIK AS NEW MINISTER OF ENERGY & MINERAL RESOURCES
COALspot.com - Jero Wacik has been appointed as minister of energy and mineral resources of Indonesia replacing Darwin Saleh and Prof. Widjajono Par ...
Tuesday, 18 October 11
DELTA DUNIA MAKMUR HAS PRODUCED 3.0 MILLION TONS OF COAL LAST MONTH
COALspot.com - PT. Delta Dunia Makmur, wholly owned subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), Delta Dunia Makmur has removed 1.4 million bcm ...
Monday, 17 October 11
KOWEPO TO BUY 260,000 MT BITUMINOUS COAL
COALspot.com - KOWEPO has issued a spot tender for 260,000MT of minimum 5,600kcal/kg NAR Bituminous Coal.
The tender document also mentioned tha ...
Monday, 17 October 11
CAPESIZE SHIPPING COSTS CLIMB TO 10-MONTH HIGH ON ORE IMPORTS
The cost to hire capesize vessels climbed to a 10-month high as rising imports of iron ore to China boosted demand for the ships.Monthly iron-ore sh ...
Saturday, 15 October 11
BUNKER PRICES AND DEMANDS PUSHED FREIGHT RATES UP - VISTAAR
COALspot.com - The market continued to be firm with all segments moving up with biggest gain in Handy size segment up by 15 pct. The BDI was u ...
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- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Planning Commission, India
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
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