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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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Sunday, 14 August 11
SUPRAMAX CHARTER RATES SHARPLY UP - CAPT.REDDY
COALspot.com - The BDI ended positive with gains in Cape and Panamax index. The BDI was up by 1.50 pct and the cape and panamax index was up by almo ...
Saturday, 13 August 11
GMR HAS ENTERED INTO CSPA WITH GEMS TO ACQUIRE 30% STAKE
COALspot.com - GMR Infrastructure Investments (Singapore) Pte Ltd, a subsidiary of GMR Infrastructure, has signed conditional sale and purchase agre ...
Friday, 12 August 11
COAL MINERS WILL ALLOW TO CONSTRUCT MINE MOUTH POWER PLANT
COALspot.com - The government is set to draft a regulation to enable construction of steam-fired power plants (PLTU) by coal mining companies for th ...
Friday, 12 August 11
CAPESIZE DEMAND HELPS LIFTING OF DRY BULK MARKET - HELLENIC SHIPPING NEWS
The dry bulk market has recovered a small fraction of its lost ground this week, with higher returns as a result of increased capesize demand. This ...
Thursday, 11 August 11
INDO TAMBANGRAYA 1H NET PROFIT SOARS 53.09%
Coal miner PT Indo Tambangraya Megah Tbk (ITMG) today reported a 53.09% jump in net profit for the first 6 months of this year on the back of higher ...
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- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Deloitte Consulting - India
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Australian Coal Association
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
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