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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, 13 November 14
MODERN DRY BULK SHIPS' PRICES START FIRMING UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
While the main story of the past few weeks has been the rebound of the dry bulk market, which has been a result of increased Chinese iron ore impor ...
Wednesday, 12 November 14
PANAMAX: WITNESSED A FAIRLY STABLE MARKET IN THE ATLANTIC
COALspot.com: Despite the fact that the Dry Bulk market noted another weekly increase, clouds of uncertainty returned mid-week onwards, as the mini ...
Wednesday, 12 November 14
SHIPPING MARKET INSIGHT - CHRISTOPHER T. WHITTY
COALspot.com: The fight continues between the low-cost iron ore producers and the big three: Vale, Rio Tinto and BHP Billiton. We are moving into a ...
Tuesday, 11 November 14
FACING CHALLENGES AND MEETING OPPORTUNITIES - INTERNATIONAL EPC CONFERENCE & EXHIBITION
Press Release: SKYCONNECTION and TRANSEVENT, which is fully supported by the Institution of Engineers Indonesia and Ministry of Industry of the Rep ...
Tuesday, 11 November 14
NEWCASTLE COAL SWAP CLOSED AT $ 52.65 FOR Q1' 15 DELIVERY
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery decreased US$ 2.83 (-5.10%) month over month and US$ 1.35 (-2.50%) week ove ...
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- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Central Electricity Authority - India
- Independent Power Producers Association of India
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- The University of Queensland
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Australian Coal Association
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
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