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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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Thursday, 20 November 14
MOST MAJOR ASIAN ECONOMIES TO BENEFIT FROM LOWER OIL - FITCH
COALspot.com: The 25% drop in the price of oil since July is likely to lift economic growth prospects, improve terms of trade, and have a pot ...
Thursday, 20 November 14
HANDY: INDO ROUNDS ARE BEING FIXED IN REGION OF US$ 10K - FEARNLEYS
Handy
In the Atlantic we have experienced firmer rates this week much lead by the grain activity out of USG. Vsls open in the USG can achieve in ...
Thursday, 20 November 14
DEMAND FOR DRY BULK CARRIERS INCREASES ON THE BACK OF HEIGHTENED FREIGHT RATE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners are looking to take advantage of favorable market conditions through the acquisition of more dry bulk carriers. According to shipbroker ...
Wednesday, 19 November 14
INDONESIA FUEL-PRICE RISE A CLEAR, POSITIVE REFORM SIGNAL - FITCH
COALspot.com: Indonesia's hike of more than 30% in administered fuel prices, announced on 17 November, provides a clear, positive signal of the ...
Wednesday, 19 November 14
CAPES WERE UNDER PRESSURE; LOST 20% WITHIN A WEEK
COALspot.com: " The negative environment in which the week prior ended, marked this past week as well, which closed off on Friday noting the f ...
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- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- The University of Queensland
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Minerals Council of Australia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- PTC India Limited - India
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
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