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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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Thursday, 25 August 11
OPG EXPECTS COAL PRICES TO REMAIN FIRM IN THE SHORT TERM
COALspot.com - Revenue of OPG, the developer and operator of Group Captive power plants in India up 188% to £33.15m and Income from continuing ...
Thursday, 25 August 11
PAITON POWER LOOKING FOR 3.96 MILLION TONS OF COAL
COALspot.com - PT Pembangkit Jawa Bali (PJB) is looking for 3.96 million tons coal with calorific value 4,800 kcal/kg on as received basis. Accordin ...
Tuesday, 23 August 11
ICMA CALLS GOVERNMENT TO REVIEW EXPORT BAN REGULATION
COALspot.com - Chairman of the Indonesian Coal Mining Association (ICMA) Bob Kamandanu asks the government to review the regulation that being draft ...
Tuesday, 23 August 11
ADARO ENERGY ACQUIRES 75% STAKE OF PT MUSTIKA INDAH PERMAI FOR US$ 222.5 MILLION
COALspot.com - PT Alam Tri Abadi, a wholly owned subsidiary of PT Adaro Energy Tbk, signed a share purchase agreement to acquire a 75% stake of PT M ...
Tuesday, 23 August 11
COAL DEMAND IS REMAINED STRONG IN SPITE OF CURRENT GLOBAL ECONOMIC UNCERTAINTY - BUMI
COALspot.com - Indonesia's largest coal producer, PT Bumi Resources, Tbk (BUMI)'s sales revenue has increased to US$1.79 billion (compared with US ...
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- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
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