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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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Thursday, 06 October 11
SOUTH EAST ASIAS AGGRESSIVE POWER DEMAND GROWTH WILL REQUIRE INVESTMENT OF US$125 BN BY 2020 - WOOD MACKENZIE
COALspot.com - Wood Mackenzie says that South East Asia’s demand growth for new power generation is so aggressive that new power generation in ...
Thursday, 06 October 11
CHINESE DEMAND FOR COAL IMPORTS TO MODERATE IN 2012 - MISWIN MAHESH
COALspot.com - We expect Chinese demand growth for imported steam coal to moderate over the next year. Steam coal imports into China will modera ...
Wednesday, 05 October 11
MINISTRY STICKING TO RAW COMMODITY EXPORT BAN DESPITE INDUSTRY FEARS - JG
The Jakarta Globe, the one of the leading English news paper in Indonesia, reported that, the details of a controversial new regulation that would b ...
Wednesday, 05 October 11
ATLANTIC AND PACIFIC BASINS BECAME TIGHTER FOR PANAMAX LAST WEEK - BRS
A slump for both the Capes and Panamaxes sent the BDI down 1% this week, falling to 1,899 points.
The Capes saw the greatest movement, sliding - ...
Wednesday, 05 October 11
WITH CHINA ON HOLIDAY, DRY BULK MARKET REMAINS STAGNANT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has remained to healthy levels after last month’s rally, but with China going on holiday this week, things are looking sta ...
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- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Australian Coal Association
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
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