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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, 05 August 11
THE WORLDS LARGEST COAL MINER TO INVEST IN INDO MINES
COALspot.com - Golden Energy Mines (GEMS) might go for initial public offering (IPO) by the end of September 2011. The company is planning to off lo ...
Friday, 05 August 11
DRY BULK MARKET FINALLY TAKES A BREATHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market at last caught a break mid-week after a constant fall which saw the industry’s benchmark, the BDI (Baltic Dry Index) falli ...
Thursday, 04 August 11
THE HBA CONTINUES TO FALL IN AUGUST
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has set the August 2011 coal reference price at US$ 117.21 per ton slightly low ...
Wednesday, 03 August 11
DEWA RETURNS TO US$2.65 MIO NET PROFIT - INSIDER STORIES
Coal mining contractor PT Darma Henwa Tbk (DEWA), that most of its revenue is contributed by Kaltim Prima Coal and Arutmin Indonesia, returned to ne ...
Wednesday, 03 August 11
DRY BULK MARKET SINKS TO THREE-MONTH LOWS, BUT CAPESIZES COULD TURN THINGS AROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on falling this week, on the back of slow cargo demand amid the summer season. Yesterday, the BDI (Baltic Dry Index), the i ...
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- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- The University of Queensland
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- PTC India Limited - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
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