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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, 29 July 11
5300 ADB COAL WILL BE AT US$ 60/TON IN THIS QUARTER - RAIN
COALspot.com - PT Resource Alam Indonesia Tbk (KKGI) seeing the average selling price of its coal for the third quarter of this year will increase t ...
Thursday, 28 July 11
PTBA'S COAL PRICES UP IN H1 2011
COALspot.com - Bukit Asam’s coal prices in the second half of 2011 will expected to be higher than the first half of this year, said Sukrisno, ...
Thursday, 28 July 11
RESOURCE ALAM 1H PROFIT SURGES 208 PERCENT
Indonesia's tenth largest coal miner in term of concessions, PT Resource Alam Indonesia (KKGI), part of Rain Group, today reported a skyrocket net ...
Thursday, 28 July 11
DRY BULK MARKET EDGES FURTHER DOWN ON ADDED PRESSURE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Baltic Dry Index (BDI), an indicator of dry bulk freight rates has reached new lows this week, with yesterday’s session ending further dow ...
Wednesday, 27 July 11
BLACKSTONE TO INVEST INR 5,000 MILLION (APPRX. US$ 111 MILLION) IN VISA POWER
Press Release - The Blackstone Group (NYSE: BX) today announced that it will be investing INR 5,000 million (c. USD 111 million) in VISA Power ...
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- Karaikal Port Pvt Ltd - India
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- Aditya Birla Group - India
- Indonesian Coal Mining Association
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
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