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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, 27 October 14
CFR SOUTH CHINA COAL SWAPS PERFORMED POSITIVE THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery decreased US$ 1.68 (-2.55%) month over month and increased US$ 0.87 (+1.3 ...
Sunday, 26 October 14
CAPE'S STRONG PERFORMANCE PUSHES BDI INDEX UPWARDS
COALspot.com: The BDI was up by 26.27 pct and closed at 1192 points week and week. The Cape size performance has pushed up BDI and Cape size index ...
Friday, 24 October 14
WEEKLY U.S COAL PRODUCTION DOWN 2.7% FOR THE WEEK ENDING OCTOBER 18
COALspot.com – United States the world's one of largest coal producers, produced approximately 18.7 million short tons (mmst) of coal in ...
Thursday, 23 October 14
THE BEARS, HOWEVER, STILL CRY; FOR HOW LONG WILL IT LAST? - FEARNLEYS
Handy
"We experience a typical oversupply of ships in the Atlantic which causing rates to slide. In the USG it is just enough cargoes to kee ...
Wednesday, 22 October 14
MARKET INSIGHT - THEODORE NTALAKOS, INTERMODAL
ECO designs - revisited
The ECO vessels are already here but the oil and bunker prices are plummeting to their cheapest level since 2010. Is this ...
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- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- PTC India Limited - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Australian Coal Association
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
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