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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, 10 August 11
KILLARA RESOURCES TO ACQUIRE SIX COAL CONCESSIONS OF TASON HOLDINGS
COALspot.com - Killara Resources Limited, an Australian listed company has formed PT Tavesco Killara Energy (TKE), a joint company with PT Tavesco I ...
Wednesday, 10 August 11
RESOURCE NATIONALISM IS MAIN BUSINESS RISK FOR MINING SECTORS, E&Y SURVEY
Resource nationalism is top of the business risk list for mining and metals companies around the world, while supply capacity constraint issues cont ...
Wednesday, 10 August 11
INDONESIAN COAL MINING ASSOCIATION OPPOSES LOW-GRADE COAL EXPORT BAN
COALspot.com - The Indonesian Coal Mining Association (ICMA) frowns on and challenges the government plan to ban the low-grade coal export inf ...
Wednesday, 10 August 11
ABM INVESTAMA TO OFFLOAD 20% IPO
Integrated coal mining PT ABM Investama, affiliated company of Tiara Marga Trakindo Group, aims to dispose 20% stake during an initial public offeri ...
Tuesday, 09 August 11
INDONESIAS COAL PRODUCTION GREW BY 19.4% LAST YEAR - BP
COALspot.com - Indonesia’s coal production grew by 19.4% last year to 305.879 million tonnes from 256.181 million tonnes in 2009, the fastest ...
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- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Singapore Mercantile Exchange
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- Kohat Cement Company Ltd. - Pakistan
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- Directorate Of Revenue Intelligence - India
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- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
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- Bahari Cakrawala Sebuku - Indonesia
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- Karbindo Abesyapradhi - Indoneisa
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- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
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- Indogreen Group - Indonesia
- Planning Commission, India
- Ministry of Transport, Egypt
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- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- The Treasury - Australian Government
- The University of Queensland
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- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
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- International Coal Ventures Pvt Ltd - India
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- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
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- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
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- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
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- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
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- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
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- Independent Power Producers Association of India
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- SMC Global Power, Philippines
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- Parliament of New Zealand
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- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
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