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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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Friday, 14 November 14
U.S. WEEKLY COAL OUTPUT SLIPS SLIGHTLY WEEK ENDING NOVEMBER 08
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.9 million short tons (mmst) of coal ...
Friday, 14 November 14
MORE NATURAL GAS FROM RUSSIA TO HELP STABILISE CHINA PRICES - FITCH RATINGS
COALspot.com: Fitch Ratings has said possible additional natural gas supplies from Russia's OAO Gazprom to China via the Altai pipeline would h ...
Thursday, 13 November 14
SLOWER AND LOWER HAS BEEN THE TREND OF THE PANAMAX IN BOTH HEMISPHERES - FEARNLEYS
Handy
We are experiencing an oversupply of tonnage in the Atlantic which is out numbering the amount of cargoes, Fearnleys broker says in its lat ...
Thursday, 13 November 14
DRY BULK MARKET'S REBOUND HINGES ON IRON ORE OVERSUPPLY ISSUES MOVING FORWARD - HELLENIC SHIPPING NEWS
“One man’s benefit, is another man’s demise” is a phrase which can be used to describe today’s situation in the dry b ...
Thursday, 13 November 14
COAL MINISTER WANTS INDIA TO STOP COAL IMPORTS IN TWO OR THREE YEARS
COALspot.com: India to ramp up coal production to a billion tonnes by 2019 from its current level of 490 million tones. According to Power and Coal ...
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- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Australian Coal Association
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- The University of Queensland
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
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