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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, 29 December 14
SGX'S FOB NEWCASTLE COAL SWAPS IMPROVED W-O-W, LOST M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 1.44 per MT (-2.73%) month over month and gained US$ 0.36 (+0.71%) ...
Friday, 26 December 14
SHIPS FACE LOWER SULPHUR FUEL REQUIREMENTS IN EMISSION CONTROL AREAS FROM 1 JANUARY 2015 - IMO
Ships trading in designated emission control areas will have to use on board fuel oil with a sulphur content of no more than 0.10% from 1 January 2 ...
Wednesday, 24 December 14
CAPE DEMAND WAS STILL EXTREMELY SOFT THIS PAST WEEK ACROSS BOTH BASINS - INTERMODAL
COALspot.com: The performance of the Dry Bulk market, which found itself in desperate search of support for yet another week, has left very little ...
Wednesday, 24 December 14
MARKET INSIGHT - JOHN N. COTZIAS, INTERMODAL SNP BROKER
The year is coming to an end, and we should be able to assess if this was a good year, a bad year, or even a lousy one? The answer clearly de ...
Tuesday, 23 December 14
Q1'15 FOB INDONESIA COAL SWAP GAINED 48 CENTS IN ONE WEEK
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and gained week over week and day on day.
The Q1 swap has lo ...
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- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
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