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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 February 15
Q2' CFR SOUTH CHINA COAL SWAP DECLINED 3.28% TO $ 56.92 W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 1.93 (-3.28%) per MT month over month and US$ 0.10 (-0 ...
Sunday, 08 February 15
BDI FELL CONTINUOUSLY HIT A THREE DECADES LOW
COALspot.com: This week Baltic Exchange Dry Freight Index (BDI) fell continuously hit a three decades low.
The BDI continuously fell and was d ...
Friday, 06 February 15
WEEKLY U.S. COAL PRODUCTION UP AN ESTIMATED 1.1% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 20.1 million short tons (mmst) of coal ...
Friday, 06 February 15
SHIP DAMAGED BY FIRE CAUSED BY PIRATES FOUND TO BE CONSTRUCTIVE TOTAL LOSS - TAYLOR WESSING
KNOWLEDGE TO ELEVATE
The High Court was asked to determine a number of preliminary issues, including whether a vessel was a constructive total ...
Thursday, 05 February 15
BDI HAS NOW FALLEN A LEVEL CLOSE TO THE INDEX'S HISTORIC LOW - INTERMODAL
They say a picture is worth a thousand words and in this instance just one look at the tables above is enough to understand the great pressure the ...
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- PTC India Limited - India
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
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