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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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Thursday, 12 February 15
DRY BULK OWNERS SCRAP MORE VESSELS, AS MARKET REACHES HISTORICAL LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has reached historical lows this week, with the Baltic Dry Index (BDI) now trading at levels below operating expense levels for ...
Thursday, 12 February 15
INDONESIAN COAL PRICE REFERENCE INCHED DOWN 1.44% IN FEBRUARY
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 62.92 pe ...
Thursday, 12 February 15
NEWBUILDING ORDERING ACTIVITY DRAGS ON, AS OWNERS ARE LOOKING FOR LOWER PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners appear to be waiting for lower prices in their dealings with Asian shipyards, as the dry bulk market is at historical lows. According t ...
Wednesday, 11 February 15
DRY BULK MARKET REMAINED UNDER PRESSURE : STABILIZING CAPE MARKET HARDLY HELPED SENTIMENT
COALspot.com: The Dry Bulk market remained under pressure last week, while the stabilizing Cape market hardly helped sentiment.
Greece based s ...
Wednesday, 11 February 15
BDI HITTING THE ALL-TIME LOW; FFA MARKETS NOT SHOWING ANY POSITIVE SIGNS
With the BDI hitting the all-time low and with FFA markets not showing any positive signs for a possible recovery in the near future, pessimism is ...
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- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Minerals Council of Australia
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- PTC India Limited - India
- The University of Queensland
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
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