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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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Tuesday, 13 January 15
MORE PITFALLS FOR OWNERS LOOKING TO TERMINATE FOR UNPAID HIRE - INCE & CO
KNOWLEDGE TO ELEVATE
It is a debatable point whether or not the obligation to pay hire under a time charter is a condition of the contract or ...
Tuesday, 13 January 15
Q2 CFR SOUTH CHINA COAL SWAP DECLINED 8.66% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined by US$ 3.48 (-5.73%) month over month and US$ 2.35 (-3.94%) week ...
Tuesday, 13 January 15
Q1' 2015 RICHARDS BAY COAL SWAP SLIGHTLY HIGHER THAN Q2 & Q4 2015 SWAPS
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 7.21 ...
Monday, 12 January 15
COAL: LOW PRICES ARE EXPECTED TO DRIVE A SUPPLY-DRIVEN RECOVERY IN THE MEDIUM TERM - SGX
COALspot.com: Thermal coal prices dropped to six-year lows in 2014 driven by persistent oversupply, SGX says in its “ Commodities 2014 - A ye ...
Monday, 12 January 15
FREIGHT MARKET: 2015 FLEET SUPPLY GROWTH IS EXPECTED TO REMAIN SLIGHTLY AHEAD OF CARGO GROWTH - SGX
COALspot.com: The dry bulk freight market was forced to digest a number of negatives in 2014 leading the Baltic Dry Index to fall 66% through the y ...
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- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
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