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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, 23 November 14
ITALY'S STEAM COAL IMPORTS TO DROP BY 11% IN 2014 - ASSOCARBONI
COALspot.com: Italy’s steam coal imports expected to drop to 16 million tons in 2014 (-11% compared to 2013); coking coal imports to plunge t ...
Saturday, 22 November 14
THE FALL IN BUNKER PRICES REDUCE FUEL COSTS SIGNIFICANTLY - BIMCO, PETER SAND
For a ship that burns 24 tonnes of fuel per day while steaming, fuel costs are reduced by as much as USD 1 million a year if current price level st ...
Saturday, 22 November 14
DRY BULKERS NEWBUILDING DELIVERIES REACHED 11.8 MILLION DWT DURING THIRD QUARTER, NET FLEET GROWTH FOR 2014 TO REACH 5% - HELLENIC SHIPPING NEWS
The dry bulk market has rebounded since its less than impressive performance since the start of the year, but overall, third quarter figures could ...
Friday, 21 November 14
BUMI ENTERS INTO CONDITIONAL SALE & PURCHASE AGREEMENT TO SELL FBS STAKE
COALspot.com: PT Bumi Resources Tbk, one of the Indonesia's largest coal producers confirms that it has executed a Conditional Sale and Purchas ...
Friday, 21 November 14
U.S LAST WEEK'S COAL PRODUCTION STAYS FLAT W-O-W
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.9 million short tons (mmst) of coal ...
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- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
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