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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, 09 October 11
FREIGHT MARKET ENDED WITH A POSITIVE DIRECTION - VISTAAR
COALspot.com - The market ended with a positive note with all the segments up except for handy size. The biggest gainer was Panamax index up by 11 p ...
Saturday, 08 October 11
INDONESIAN MINER PLANS $167M IPO TO FUEL SUMATRA COAL BOOM - JG
The Jakarta Globe reported that, coal miner Atlas Resources aims to raise as much as Rp 1.5 trillion ($167 million) in an initial public offering to ...
Friday, 07 October 11
MINING REGULATIONS , OBSTACLES AND GROWTH : INDIA VS INDONESIA - SUNIL K KUMBHAT
COALspot.com - The Govt of India has passed long pending Mines & Minerals (Regulation and Development) Bill, 2011, which seeks to replace ...
Friday, 07 October 11
$100M FOR EXPANSION INTO KALIMANTAN MINING: AKR
The Jakarta Globe, one of the leading English news paper in Indonesia reported that, AKR Corporindo, a fuel and chemical distributor, has set aside ...
Thursday, 06 October 11
REALM SECURES 51% OF KATINGAN RIA COAL PROJECT IN CENTRAL KALIMANTAN
•Realm secures 51% of PT Katingan Ria Thermal Coal Project in Central Kalimantan
•Realm takes ownership of Kalres Limited
•Acquisit ...
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- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- White Energy Company Limited
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
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