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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, 12 January 15
SHIPPING - CHALLENGES AND RESOLUTIONS - EVA TZIMA
Last year has without a doubt been another challenging one both for both our industry and our country. As Greece is currently dominated by election ...
Sunday, 11 January 15
BDI DECLINED 8% ON WEEK; BCI LOST 31%
COALspot.com: The BDI continued its decline in the first week of this year or lost 8 pct week over week. The BDI was closed at 709 points whi ...
Friday, 09 January 15
U.S. EASTERN SPOT STEAM COAL PRICES FELL IN 2014; ROSE IN WEST - EIA
U.S. Eastern spot steam coal prices declined in 2014 compared to 2013 levels because of a decline in steam coal exports.
According to U.S. Ene ...
Friday, 09 January 15
WEEKLY U.S. COAL PRODUCTION UP AN ESTIMATED 2.2% Y-O-Y
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.6 million short tons (mmst) of coal ...
Thursday, 08 January 15
INDONESIA PRESSES ON WITH HIGHER COAL ROYALTY FEE TO BOOST STATE REVENUE - JG
The Indonesian government is pressing on with its plan to raise the royalty charged to coal miners in order to increase state revenue, but the move ...
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- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Minerals Council of Australia
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
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