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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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Monday, 09 March 15
CHINA'S IMPORTS - NEVER MORE IMPORTANT TO SHIPPING? - CLARKSONS
Over the last 15 years China has led maritime forecasters a right old dance. In 2002, rumours that Chinese iron ore imports were about to take off ...
Sunday, 08 March 15
FREIGHT RATES FROM INDONESIA TO INDIA IS TRENDING UP
COALspot.com: The freight market continued to see gains this week and all the indices were rose except for Cape index. The BDI was increased 4.62 p ...
Friday, 06 March 15
BALTIC DRY INDEX: IS THIS POWERFUL INDICATOR SIGNALING A GLOBAL RECESSION? - STREET AUTHORITY
Although memories of the Great Recession linger, a case can be made that better days lie ahead.
That’s because central banks around the ...
Friday, 06 March 15
U.S. WEEKLY COAL PRODUCTION ROSE 3.5% WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.1 million short tons (mmst) of coal ...
Thursday, 05 March 15
PANAMAX : THE ATLANTIC ROUND IS NOW PAYING AROUND US$ 5K PER DAY
COALspot.com: Handy - The activity in the handy/supra segment is back. “ We see more fresh cargo in the market for 2nd half March dates ...
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- Carbofer General Trading SA - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Economic Council, Georgia
- CNBM International Corporation - China
- White Energy Company Limited
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Australian Coal Association
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
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