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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, 03 September 11
TNPL TO BUY 240K MT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure 240,000 MT +/- 5 percent of non-coking imported coal with ...
Friday, 02 September 11
CAPESIZE DEMAND LIFTS DRY BULK MARKET ONCE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what proves to be the best week of the year for Capesize owners, strong demand has helped propel the dry bulk market to new highs yesterday. The ...
Thursday, 01 September 11
EWP TO BUY 195KT OF VIETNAM COAL
COALspot.com - Korea Midland Power (KOMIPO) has issued an International open bidding for 490kt of sub bituminous coal, according to a bid invitation ...
Thursday, 01 September 11
DRY BULK MARKET TAKES GREAT LEAP FORWARD - NIKOS ROUSSANOGLOU
In what turned out to be a rather hopeful ending of the month, the last day of August saw the dry bulk market’s benchmark, the BDI (Baltic Dry ...
Tuesday, 30 August 11
FAUJI CEMENT CONSUMED MORE THAN 1 MILLION TONS OF LOCAL COAL
Cooper Minerals Inc.based in Vancouver, BC, Canada, is a junior exploration company engaged in the acquisition, exploration and development of miner ...
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- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- The Treasury - Australian Government
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Planning Commission, India
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