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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, 13 September 11
CAPITAL COSTS OF INDIAN COAL MINING PROJECT - AN ANALYST VIEW
By Mr Dipesh Dipu, Director - Consulting (Mining), Deloitte Touche Tohmatsu India Private Limited
The coal mining sector that has been opened par ...
Tuesday, 13 September 11
INDONESIAS COAL SECTOR EYES 2012 BOOM - JG
The Jakarta Globe, Indonesian English language News paper reported that, Coal production is set to surge next year as coal miners bolster their busi ...
Tuesday, 13 September 11
DRY BULK RALLY MAINTAINS MOMENTUM AT START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum at the start of the week, as the industry’s benchmark, the Baltic Dry Index (BDI) was up by 2.07% ...
Monday, 12 September 11
INDONESIAN GOVERNMENT HAS ALLOCATED MORE COAL FOR 2012
COALspot.com - Indonesian government has increased the domestic market obligation allocation to 82.07 million tons of coal for 2012, which is 4 perc ...
Saturday, 10 September 11
THE FREIGHT MARKET LIKELY TO BE FIRM NEXT WEEK - CAPT. REDDY
COALspot.com - The freight market continued the upward trend during last week with BDI crossing 1,800 points and closing at 1,838 points up by 5.63 ...
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- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Australian Coal Association
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- MS Steel International - UAE
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Planning Commission, India
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
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