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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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Tuesday, 11 November 14
PORT OF NEWCASTLE'S OCTOBER COAL SHIPMENTS SLIPPED 7.40% M-O-M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1,115.7 mil ...
Monday, 10 November 14
Q4' 15 FOB INDONESIA COAL SWAP CLOSED LOWER THAN Q1' 15 CLOSING PRICE OF US$ 49.58 ON LAST FRIDAY
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week on week and day on day.
The Q1 swap has lost just US$ ...
Monday, 10 November 14
SGX'S API 4 FOB RICHARDS BAY COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 65.44 ON 7 NOV, LOST 4.08% M-O-M
COALspot.com: API 4 FOB Richards Bay Coal swap for Q1’ 2015 delivery has decreased US$ 2.78 (-4.08%) month over month and US$ 1.41 (-2.11%) w ...
Monday, 10 November 14
MOZAMBIQUE SIGNED CONTRACT WITH ETA STAR OF UAE FOR OPEN CAST COAL MINE IN TETE - AIM
- ETA Star to build slurry pipeline over the 600 kilometers to Beira in Mozambique to transport coal.
- The viability studies show the presence o ...
Monday, 10 November 14
YEAR 2015 CFR SOUTH CHINA COAL SWAP SHOWS A WEAK TREND THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 3.74 (-5.63%) month over month and US$ 2.19 (+3.37%) we ...
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- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
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