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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, 26 November 14
OVERSUPPLY OF TONNAGE PUSHED PANAMAX SEGMENT DOWN FOR ANOTHER WEEK
COALspot.com: The Dry Bulk market managed to reverse its course from the week prior and with the sole exception of the Panamax segment, we witnesse ...
Wednesday, 26 November 14
SHIPPING MARKET INSIGHT - EVA TZIMA
The tanker market has been enjoying some good returns lately. Ok, that may be a big understatement, but with all the ups and downs of the past year ...
Tuesday, 25 November 14
FISCAL BREAKEVEN OIL PRICES SHOW SOVEREIGN VULNERABILITY - FITCH
COALspot.com: The vulnerability of the sovereign credit profiles of net oil exporters, as shown by their fiscal breakeven oil prices, suggests that ...
Tuesday, 25 November 14
UK: TRIBUNAL RULES ON SPEED AND PERFORMANCE CLAIMS UNDER TWO CONSECUTIVE TIME CHARTERPARTIES - REED SMITH
KNOWLEDGE TO ELEVATE
“Owners not to be responsible if the vessel under the currency of this charter party stays at port or anchorage or ...
Tuesday, 25 November 14
FOB RICHARDS BAY COAL SWAP FOR Q4' 15 DELIVERY CLOSED AT US$ 68.20
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 gained month on month, week on week and day over day.
The Q1 swap has gain ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
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