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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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Saturday, 06 December 14
MUNDRA PORT MAKES HISTORY BY HANDLING THE LARGEST BULK CARRIER TO CALL ON WEST COAST OF INDIA
COALspot.com: Adani Ports & SEZ Ltd, India’s largest port developer and part of Adani Group, yesterday said its Mundra Port successf ...
Friday, 05 December 14
CHINESE SPECIAL STEEL MAKERS' RISK PROFILES MORE RESILIENT - FITCH
Fitch Ratings says the risk profiles of Chinese makers of special steel, especially high-end products, are more like those of manufacturers and mor ...
Friday, 05 December 14
U.S. YEAR-TO-DATE COAL PRODUCTION REACHED AROUND 905 MMST - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19 million short tons (mmst) of coal i ...
Thursday, 04 December 14
CAPE MARKET IS DEVELOPING FROM BAD TO WORSE
Handy
The Atlantic market has been pretty stable and balanced this week, Fearnleys AS says in its latest weekly report.
The broker furt ...
Thursday, 04 December 14
DRY BULK MARKET; ANOTHER DISAPPOINTING WEEK
COALspot.com: For those who have been hoping to see alignment of freight direction across the Dry Bulk market, this must have been another disappoi ...
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- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
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- Singapore Mercantile Exchange
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- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
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- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
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- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Eastern Energy - Thailand
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- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
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- Parry Sugars Refinery, India
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- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
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- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
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- Parliament of New Zealand
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- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Planning Commission, India
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- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
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- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
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- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
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- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
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- Wilmar Investment Holdings
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- The University of Queensland
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
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- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
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- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
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- Kepco SPC Power Corporation, Philippines
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