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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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Tuesday, 10 March 15
OIL PRICE FORECASTING - IGNORE THE EXPERTS: COLIN MARSHALL
KNOWLEDGE TO ELEVATE
Experts put themselves on a pedestal, making claims to have special forecasting abilities for oil price trends. They, too ...
Tuesday, 10 March 15
FOB NEWCASTLE COAL SWAPS HEADING SOUTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 0.24 per MT (-0.47%) month over month and US$ 1.52 (-2.93%) we ...
Tuesday, 10 March 15
CFR SOUTH CHINA POWER-STATION COAL SWAPS DECLINE
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery fell US$ 0.42 (-0.74%) per MT month over month and declined US$ 1.00 &nbs ...
Monday, 09 March 15
INDONESIA GREETS INDIA RATE CUT AS GOOD FOR EXPORTS - GLOBEASIA
Indonesian commodity producers and economists have hailed the Indian central bank’s rate cut as good for boosting exports from Southeast Asia ...
Monday, 09 March 15
CHINA'S SUPREME COURT ISSUES NEW JUDICIAL INTERPRETATION ON SHIP ARREST AND JUDICIAL SALE OF SHIPS - GARD
KNOWLEDGE TO ELEVATE
China is not traditionally a popular jurisdiction for ship arrest. However, Members and clients with ships calling at por ...
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- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- White Energy Company Limited
- Coal and Oil Company - UAE
- Australian Coal Association
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- India Bulls Power Limited - India
- Planning Commission, India
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
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