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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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Sunday, 15 February 15
BALTIC DRY INDEX CONTINUALLY DIPPED IN RED
COALspot.com: The Baltic Dry Index continues its decline and fell 5.18 pct to 530 points week on week due to falling commodity prices and declining ...
Saturday, 14 February 15
SHALE GAS AND TIGHT OIL ARE COMMERCIALLY PRODUCED IN JUST FOUR COUNTRIES - EIA
KNOWLEDGE TO ELEVATE
The United States, Canada, China, and Argentina are currently the only four countries in the world that are producing com ...
Friday, 13 February 15
U.S. WEEKLY COAL PRODUCTION SHOWS 10% DECLINE
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.1 million short tons (mmst) of coal ...
Friday, 13 February 15
SMALL AND MEDIUM-SIZED SHIP OWNERS SQUEEZED OUT OF THE MARKET ON CRASHING DRY BULK MARKET AND EUROZONE CRISIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Financing issues have started to tighten the noose in the throats of small and medium-size ship owners, who were already facing problems over the p ...
Thursday, 12 February 15
CAPESIZE: THE BEST DESCRIPTION FOR THE MARKET IS, FLAT - FEARNRESEARCH
Handy
The handy and supra market is also being affected by the marginal volume of activity in the commodity sales. We see a small upturn in the T ...
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- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
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- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Planning Commission, India
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
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- Bangladesh Power Developement Board
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- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
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- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
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