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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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Wednesday, 07 January 15
FUEL EFFICIENT SHIPS MAKE LESS SENSE IN LOWER BUNKER PRICE MARKET, BUT FUEL COSTS ARE BOUND TO RISE AGAIN
The shipping industry entered 2015 on mixed emotions, as a relatively buoyant tanker market is met by a rather lackluster dry bulk market. Still, a ...
Wednesday, 07 January 15
2015 IS RIDDLED WITH CHALLENGES FOR THE SHIPPING SECTOR, MOST NOTABLY THE DRY BULK MARKET - HELLENIC SHIPPING NEWS
As the new year has now set foot for real, many are still looking to detect what’s in store for the various shipping markets, with the first ...
Tuesday, 06 January 15
SHIPPING MUST ADOPT CAN-DO ATTITUDE IN 2015 - MOORE STEPHENS
Shipping needs to adopt a can-do attitude in order to successfully meet the challenges which are likely to come its way in 2015.
Shipping part ...
Tuesday, 06 January 15
Q4' 15 FOB INDONESIA COAL SWAP CLOSED 1.81% HIGHER COMPARED TO Q1' 15 CLOSING
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 0.74 (-1.51%) m ...
Tuesday, 06 January 15
FOB RICHARDS BAY COAL SWAPS LOST W-O-W AND M-O-M, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.52 (-5. ...
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- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Planning Commission, India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- The University of Queensland
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
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