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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, 02 March 15
FOB NEWCASTLE COAL SWAP ROSE 6.89% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.35 per MT (+6.89%) month over month and US$ 0.40 (0.78%) week on ...
Sunday, 01 March 15
BDI INDEX SLIGHTLY UP CAUSED AN INCREASE IN THE PANAMAX, SUPARAMAX AND HANDY SIZE INDICES
COALspot.com: The freight market saw some gains this week and BDI was up 5.26 pct closed at 540 points. However the Cape index failed to follow BDI ...
Friday, 27 February 15
WEEKLY US COAL PRODUCTION DOWN AN ESTIMATED 14.0% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 16.5 million short tons (mmst) of coal ...
Thursday, 26 February 15
DRY BULK MARKET COULD REBOUND FROM HISTORICAL LOWS IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market could exit from its historical lows in the coming weeks, as Chinese buyers reenter the market after the holiday celebrations. T ...
Thursday, 26 February 15
COAL POLICY RISK: HIGHER ROYALTIES FOR IUP HOLDERS - BAHANA SECURITIES | JAKARTA POST
The Energy and Mineral Resources Ministry plans to raise coal royalties charged to mining operation permit (IUP) holders by the end of the first qu ...
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- MS Steel International - UAE
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- PTC India Limited - India
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
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