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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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Friday, 30 September 11
INDIAN IRON ORE MARKET GETTING ACTIVE - FEARNLEYS AS
Handy
The Atlantic market continued its strong trend with fresh cargoes entering the market. Vessels open US Gulf fixed tick above US$ 27k back to t ...
Friday, 30 September 11
KRISHNAPATNAM PORT WINS GLOBAL PORT & COAL PORT OF THE YEAR AWARDS
COALspot.com - Krishnapatnam Port, a dynamic new generation world class port located in the East Coast of India has been adjudged the winner in the ...
Thursday, 29 September 11
INDONESIA'S MINERS FACE AN UNCERTAIN FUTURE - RUPERT WALKER
An evolving regulatory framework for the country's minerals industry could threaten its profitability and stifle investment.
The five-year surge ...
Thursday, 29 September 11
DRY BULK MARKET FALLS MID-WEEK, FURTHER DROP EXPECTED NEXT WEEK ON CHINA HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, as reflected by the Baltic Dry Index (BDI) retreated by 0.36% yesterday reaching 1,920 points, with the Capesize segment suffer ...
Wednesday, 28 September 11
ATLAS RESOURCES TO SELL 25% STAKE IN IPO - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, plans to sell 783.33 m ...
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- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Minerals Council of Australia
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
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