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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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Sunday, 28 August 11
FREIGHT MARKET COULD BE FIRM NEXT MONTH - VISTAAR
COALspot.com - The freight market continued the upward trend first half of the week . However, towards the end of the week lost momentum and the BDI ...
Saturday, 27 August 11
JAPANESE BULK CARRIER SETS RECORD ON NORTHERN SEA ROUTE - BARENTS OBSERVER
The Northern Sea Route will see its third record in less than a month when the largest ever bulk carrier to take the route leaves Murmansk next week ...
Saturday, 27 August 11
RBCT-INDIA ROUNDS FIXED AT AROUND US$ 12K - FEARNBULK
Handy
Stable but very positional markets across all segments in the Atlantic: the gap between owners and charterers rate ideas is building up as o ...
Friday, 26 August 11
TUAH TURANGGA AGUNG ACQUIRES AN ADDITIONAL 40% SHARES IN BARA PRIMA AGUNG
COALspot.com - PT Tuah Turangga Agung, a subsidiary of PT United Tractors Tbk, has signed an acquisition agreement to acquire 40% of PT Bara Prima A ...
Friday, 26 August 11
INTRACO EYES US$200 MIO COAL TAKEOVER - INSIDER STORIES
Heavy equipment distributor PT Intraco Penta Tbk, that was founded by Halex Halim, is scouting a coal acquisition with the valuation above US$200 mi ...
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- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Economic Council, Georgia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
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