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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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Sunday, 30 November 14
SUPRAMAX COAL FREIGHT RATES FROM INDONESIA TO INDIA : FIRM
COALspot.com: The BDI fell 171 points and closed at 1153 points on Friday 28 November 2014. The Cape index also lost 887 points and closed at 2151 ...
Friday, 28 November 14
NEW BIMCO CLAUSE AIMS TO REDUCE SUPPLIERS' RELIANCE ON SHIP ARREST FOR CHARTERERS' UNPAID BUNKERS
KNOWLEDGE TO ELEVATE
Ship owners can, on occasion, find themselves in the invidious position of suffering unexpected loss of hire due to a tim ...
Friday, 28 November 14
JSW ENERGY AND GRM RESOURCES JOIN GLOBALCOAL
COALspot.com: globalCOAL® announced yesterday that two new Market Members have joined its online coal trading platform. According globaCOAL&rsq ...
Thursday, 27 November 14
MINING SERVICES TAX SPIKED BY 233% - BISNIS INDONESIA
COALspot.com: The Energy and Mineral Resources Department of Indonesia said the tax contribution from mining services sector in the 3rd Q 2014 ...
Thursday, 27 November 14
PANAMAX : EXPECTATION'S FOR A STRONG END OF YEAR RUSH, DISAPPEAR DAY BY DAY - FEARNLEYS
Handy
“We have experienced a firming market the last couple of weeks. More activity from cargo owners in the Atlantic and less available to ...
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- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- The University of Queensland
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
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