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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, 09 September 11
SUPRA BARA SECURES $20 MILLION LOAN - JP
The Jakarta Post reported that, Coal miner PT Supra Bara Energi says it has secured a US$20 million loan facility from BNP Paribas to buy heavy equi ...
Friday, 09 September 11
CAPESIZE CAN SECURE USD 17-18K SHORT PERIOD - FEARNBULK
Handy
The US Gulf has remained relatively steady, slightly more activity in the South Atlantic with owners aiming for low to mid USD 20k´s f ...
Thursday, 08 September 11
UKRAINES COAL PRODUCTION TO RISE 8% - IFANDP
Industrial fuels & power reported that, Ukraine will increase its coal output by about 8% this year compared to last year, said the country&rsqu ...
Thursday, 08 September 11
DRY BULK MARKETS RALLY COMES TO AN END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was widely expected by analysts and shipbrokers alike, the latest rally of the dry bulk market came to a halt yesterday, with the Baltic Dry Inde ...
Thursday, 08 September 11
TRADA MARITIME BUYS GUNUNG BARA UTAMA
Insider Stories reported that, PT Trada Maritime Tbk (TRAM) has purchased convertible bonds issued by PT Awesome Coal from Zakia Limited. The memora ...
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- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
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- White Energy Company Limited
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- Parliament of New Zealand
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- Planning Commission, India
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- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
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- Chamber of Mines of South Africa
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- Indian Energy Exchange, India
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- The University of Queensland
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- Cement Manufacturers Association - India
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- Global Business Power Corporation, Philippines
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- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
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- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
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- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
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- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Videocon Industries ltd - India
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- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
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- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
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- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
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- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
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