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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, 09 December 14
API 8 CFR SOUTH CHINA COAL SWAPS FELL 1.8% MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 1.84 (-2.91%) month over month and US$ 0.95 (-1.52%) we ...
Monday, 08 December 14
GOVERMENT TO WITHDRAW CNC STATUS OVER SUSPECTED FLAWS - THE JAKARTA POST
The Energy and Mineral Resources Ministry’s directorate general for mineral and coal plans to review the clean and clear (CnC) status held by ...
Monday, 08 December 14
FOB NEWCASTLE COAL SWAPS SLIP W-O-W AND M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery closed at US$ 52.10 on 5 December after losing US$ 0.55 (-1.04%) month over ...
Sunday, 07 December 14
SUPRAMAX S8 ROUTE SLIGHTLY INCREASED WEEK ON WEEK
COALspot.com: The BDI continued its fall as cape index fell heavily week on week.
The BDI lost around14.83 pct within last five working day an ...
Saturday, 06 December 14
TANKER FLOATING STORAGE PLAYS COULD COME INTO PLAY IF VLCC RATES STAY AT CURRENT LEVEL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Contango: A phenomenon in commodities futures price curves where the delivery price of a futures contract is greater than the current price. With t ...
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- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- MS Steel International - UAE
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
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