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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, 23 August 11
PENRHYN COAL USING EVERGREEN ENERGYS COAL UPGRADING PROCESS
Evergreen Energy Inc has announced the successful testing results of the initial batches of Penrhyn coal using Evergreen Energy’s coal upgradi ...
Tuesday, 23 August 11
A SHARP INCREASE IN THE BDI - BRS
A sharp increase in the BDI this week, driven by the rise in Capesize rates. Overall the BDI was up 13.5% to 1,462 points on the back of a 20% surge ...
Monday, 22 August 11
INDONESIA TO BAN BELOW 5700 KCAL/KG COAL FOR EXPORT
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia is in the process of drafting a regulation which is requiring mine owners ...
Monday, 22 August 11
JATENERGY AGREED TO FORM JV WITH AN INDONESIAN COAL MINING COMPANY
COALspot.com - Australian’s listed company, Jatenergy Limited has entered conditional agreement to form joint venture with Indonesia’s c ...
Monday, 22 August 11
NTPC TO IMPORT 16 MILLION TON OF COAL TO BRIDGE THE GAP
COALspot.com - NTPC to import 16 million tons of imported coal, which is equivalent to 23-24 million tons of Indian coal to bridge the gap.
" ...
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- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Parliament of New Zealand
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- The University of Queensland
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
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