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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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Monday, 17 November 14
SKULD ISSUES URGENT NOTICE ON BANKRUPTCY OF OW BUNKER A/S
Further to the Association’s advices of 7 November 2014, more information has come to light with respect to the potential impact and scale of ...
Monday, 17 November 14
INDONESIAN COAL PRICE REFERENCE CONTINUES FREE FALL; SLUMPS TO 69-MONTH LOW
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Monday, 17 November 14
API 5 FOB NEWCASTLE COAL SWAP FOR Q1' 15 DELIVERY CLOSED AT $ 52.75
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Monday, 17 November 14
SOUTH CHINA COAL SWAP SLIGHTLY INCREASED WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 1.73 (-2.67%) month over month and US$ 0.10 (-0.16%) da ...
Sunday, 16 November 14
THE BDI LOST 12.59% WEEK ON WEEK; THE BCI LOST 19.95%
COALspot.com: The BDI fell 12.59 percent to 1256 point week on week on Friday 14 November. All the segments were also most down this week. The cape ...
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- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
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