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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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Friday, 19 August 11
INDIA IMPORTS LESS INDONESIAN COAL THAN CHINA IN JULY
COALspot.com - Indonesia shipped 31.30 Million tons of coal in July 2011, up by 10.69 percent compared to June's export of about 28.27 ...
Thursday, 18 August 11
INDONESIAS PROPOSED LOW GRADE COAL EXPORT BAN WILL NOT HAVE A SIGNIFICANT IMPACT ON INDIA - MISWIN MAHESH
COALspot.com - The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by Jan ...
Thursday, 18 August 11
MARUBENI ACQUIRED 42.86% OF YTL JAWA POWER
COALspot.com - Marubeni Corporation (Marubeni) has completed the acquisition of 42.86 percent of the shares of YTL Jawa Power Holdings BV from YTL P ...
Wednesday, 17 August 11
CME LAUNCHES ARGUS COKING COAL SWAP FUTURES
COALspot.com - Argus media reported that, leading exchange CME Group will list an Australian coking coal swap futures contract for trading on the Ny ...
Wednesday, 17 August 11
TAVESCO KILLARA ENERGY TO ACQUIRE COAL CONCESSIONS IN EAST KALIMANTAN
COALspot.com - Killara Resources Limited, an Australian listed company has formed PT Tavesco Killara Energy (TKE), a joint company with PT Tavesco I ...
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- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Australian Coal Association
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
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