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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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Monday, 22 August 11
MACRO ECONOMICS - PETER SAND BIMCO / HELLENIC SHIPPING
The US is jeopardising the global recovery as job creation remains top challenge across the board.
Global economy: While growth in most emerging ...
Sunday, 21 August 11
SUPRAMAX AVAILABILITY WAS TIGHT DUE TO UPCOMING RAMADAN HOLIDAYS
COALspot.com - The financial markets have been in turmoil with all major stock exchanges down and uncertainty prevails. However the shipping market ...
Sunday, 21 August 11
TUAH TURANGGA ACQUIRES DUTA NURCAHYA
Coal miner PT Tuah Turangga Agung, a wholly owned subsidiary of PT United Tractors Tbk (UNTR) via PT Pamapersada Nusantara), has agreed to acquire 6 ...
Friday, 19 August 11
INDIAS CICTL HAS ACHIEVED ONE MILLION TONS OF DISCHARGE
COALspot.com - Chettinad International Coal Terminal (CICTL) in Ennore port, a state of the art mechanized coal terminal, which was inaugurated on 28t ...
Friday, 19 August 11
AUSTRALIAS' ATH TO ACQUIRE 60% OF APUAH COAL MINE IN INDONESIA
COALspot.com - Australian listed company, Atech Holdings Limited (ATH) has entered into a conditional binding term sheet to acquire 60 percent stake ...
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- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Independent Power Producers Association of India
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- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
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- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- The University of Queensland
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
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