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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, 12 October 11
CAPESIZE - A SURPRISE JUMP IN RATES - BRS
There was a surge across all sizes last week, resulting in the BDI gaining 101 points to end the week at 2,000 points (+5.3%). The BCI reached 3,218 ...
Wednesday, 12 October 11
CAPESIZE FREIGHT RATES BOUND TO RETREAT FROM 2011 HIGHS ON THE BACK OF TONNAGE OVERSUPPLY SAYS BIMCO
According to Nikos Roussanoglou, Hellenic Shipping, with the BDI (Baltic Dry Index) breaking yet another 2011 high yesterday and ending the se ...
Tuesday, 11 October 11
GLENCORE, SUITOR FOR BUMI PLC? - INSIDER STORIES
Insider Stories reported that, the largest commodities trader in the world, Glencore International Plc, is considering an opportunity to acquire a m ...
Tuesday, 11 October 11
RENUKA COALINDO BUYS JAMBI COAL
PT Renuka Coalindo Tbk, formerly PT Allbond Makmur Usaha Tbk plans to acquire PT Jambi Prima Coal holder of mining concession in Pauh, Sa ...
Monday, 10 October 11
MOZAMBIQUE CHANNEL TO BE THE NEW PIRACY HOTSPOT FOR THIS YEAR SAYS MARITIME SECURITY EXPERT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Mozambique Channel, as well as the entrance to the Persian Gulf, are expected to become some of the new pirate hotspots for piracy, says Richard ...
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- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Deloitte Consulting - India
- PTC India Limited - India
- McConnell Dowell - Australia
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Minerals Council of Australia
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
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