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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, 05 February 15
ULTRAMAX LEVELS FROM INDIA TO CHINA IN THE MID US$ 5000'S - FEARNLEYS AS
Handy
Despite the overall weak sentiment, there is a scent of optimism in the Atlantic market for ppt dates. Continent is still struggling with o ...
Wednesday, 04 February 15
MARKET INSIGHT - LINOS KOGEVINAS
It has been just about over 2 months since, in a move that surprised many and caused widespread apprehension, OPEC decided to maintain its producti ...
Tuesday, 03 February 15
Q1'15 FOB INDONESIA COAL SWAP CLOSED $ 3.29 HIGHER COMPARED TO Q4'15 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 rose week over week and month on month.
The Q1 swap up US$ 0.68 (+1.41%) month o ...
Tuesday, 03 February 15
FOB NEWCASTLE COAL SWAP FOR Q4 DELIVERY CLOSED 5.86% LOWER THAN Q1 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery rose US$ 0.26 per MT (+0.51%) week over week and declined US$ 0.02 (-0.04%) ...
Monday, 02 February 15
API 4 FOB RICHARDS BAY COAL SWAP ROSE WEEK OVER WEEK
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and day on day.
The Q1 swap has decli ...
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- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- VISA Power Limited - India
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
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