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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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Wednesday, 17 August 11
BUMI'S H1 UNDERLYING OPERATING PROFIT $62 MILLION
COALspot.com - Bumi PLC , posted underlying first-half operating profit of $62 million and production at PT Bumi Resources and PT Berau increased to ...
Wednesday, 17 August 11
SHIP OWNERS COULD FACE PAIN ON THE BACK OF GLOOMY ECONOMYS PREDICTIONS - HELLENIC SHIPPING
The latest market turmoil, coupled with the renewed risk of a global recession could very well signal more troubled times for ship owners of all shi ...
Tuesday, 16 August 11
CHALLENGER ENTERED INTO CSPA WITH PELANGI KERTANEGARA TO ACQUIRE 100% STAKE
COALspot.com - Challenger Deep Resources Corp., through its wholly owned subsidiary, P.T. Bestindo Energy, has exercised its option to purchase an a ...
Monday, 15 August 11
ADARO ENERGYS NET INCOME MORE THAN DOUBLES IN FIRST HALF 2011
COALspot.com - Indonesian’s second largest coal producer, Adaro Energy, booked net profit US$ 268 million in the first half 2011, rose two-fol ...
Monday, 15 August 11
INDIAS MALABAR CEMENTS SEEK TO IMPORT 40,000 TONS OF COAL
COALspot.com - Malabar Cements Ltd., India's Keralaa government owned cement factory is seeking to import 40K metric tons of non-coking coal throug ...
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- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Carbofer General Trading SA - India
- White Energy Company Limited
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Planning Commission, India
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
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