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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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Sunday, 09 November 14
CAPE INDEX UP 3.06%; PANAMAX INDEX FELL 4.05%
COALspot.com: The BDI was almost at same levels compared to last week closing or just increased 0.77 pct from last week. The BDI was closed at 1437 ...
Friday, 07 November 14
U.S. PRODUCED 85.60 MILLION SHORT TONS OF COAL IN OCTOBER, UP 2.88% M-O-M
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.0 million short tons (mmst) of coal ...
Thursday, 06 November 14
THE ATLANTIC HAS REMAINED STRONG WITH A HEALTHY SUPPLY OF NEW CARGOES
Handy
This week has continued its slow trend in both hemispheres and even though rates are a bit up w-o-w it is not a clear sign for any improvem ...
Wednesday, 05 November 14
CAPESIZE SEGMENT ENJOYED FIRMING RATES ACROSS BOTH BASINS
Following a fantastic week in terms of rate performance for Capes, the Dry Bulk market managed to note another positive weekly closing, which stron ...
Wednesday, 05 November 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
COALspot.com: The steep appreciation in dry bulker values between late 2012 and March 2014 resulted in unrealistically expensive ship values compar ...
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- Georgia Ports Authority, United States
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
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- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- The University of Queensland
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
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