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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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Saturday, 17 September 11
GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE FOR US$ 1.26 BILLION
COALspot.com - GVK group, India’s leading infrastructure developer,confirmed arrangements for the acquisition of a strategic part of large, hi ...
Saturday, 17 September 11
INDIA'S GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE PROJECTS IN AUSTRALIA
COALspot.com - GVK group, India’s leading infrastructure developer, today confirmed arrangements for the acquisition of a strategic part of la ...
Friday, 16 September 11
DELTA DUNIA MAKMUR REMOVED 30.9 MILLION BCM OVERBURDEN IN AUGUST 2011
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 30.9 million bcm (+13.2% YoY) overburden in August 2011 while coal production was at 2.9 ...
Thursday, 15 September 11
RUSSIAN COAL EXPORTS UP 10.9% IN JAN-AUG TO 71.50 MILLION TONS - PORT NEWS / HELLENIC SHIPPING
Port News reported that, Coal exports from Russia in January-August 2011 grew by 10.9% compared with the same period last year, to 71.50 million ton ...
Thursday, 15 September 11
INDIAN GOVT PLANS TO DEVELOP 9 NEW MAJOR PORTS BY 2016 - INVEST MONEY / HELLENIC SHIPPING
The government has announced to make a investment of more than Rs 22,000 crore (approximately US$ 4,623,791,331) to develop nine new major ...
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- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
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