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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, 20 September 11
MTD INAUGURATES ITS COAL TERMINAL IN JAVA ISLAND
Press Release – MTD Group of Malaysia, one of prominent key players in the development of infrastructure in Malaysia, today inaugurated their ...
Tuesday, 20 September 11
DRY BULK MARKET LOSING ITS EDGE, RETREATING AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a surge during the past couple of weeks, which saw Capesize earnings boosted and the BDI (Baltic Dry Index) reaching levels of year high and c ...
Monday, 19 September 11
CHINA IMPORTS MORE THAN 10 MMT INDO COAL IN AUGUST 2011
COALspot.com - Indonesian coal exports dropped 1.642 million tons in August compared to July exports. Indonesia exports 29.662 million tons of coal ...
Monday, 19 September 11
INDOMOBIL ENTERING INTO COAL MINING BUSINESS
COALspot.Com- PT Indomobil Sukses Internasional Tbk, part of, one of Indonesia's largest conglomerates, to enter into mining industry ac ...
Sunday, 18 September 11
THE COAL IMPORTS TO INDIA, OUT OF INDONESIA LIKELY TO PICK UP - CAPT. REDDY
COALspot.com - The freight market continued the upward trend until midweek almost touching 2,000 points, however towards second half of the week the ...
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- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
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