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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, 16 October 14
PANAMAX OWNERS RECEIVE A PREMIUM FOR GOING TO INDIA VIA INDONESIA - FEARNLEYS AS
Handy
The Handy/Supra market continues to slide in both hemispheres, said Fearnleys AS in its latest week report. In the Atlantic we see rates co ...
Thursday, 16 October 14
ARE WE GOING TO SHOOT OURSELVES IN THE FOOT ONCE AGAIN? - PANOS MAKRINOS
As the East part of our globe was coming back from its October holidays last week, everyone expected that the Dry Bulk market would follow suit and ...
Wednesday, 15 October 14
PANAMAX: ACTIVITY IN THE PACIFIC WAS UNIMPRESSIVE
The Dry Bulk market noted another weekly decline last week, while the BDI moved below 1,000 points taking down with it expectations that a post hol ...
Wednesday, 15 October 14
INDONESIAN COAL PRICE REFERENCE FELL TO FRESH MULTI-YEAR LOWS IN OCTOBER
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in October 2014.
...
Wednesday, 15 October 14
DRY BULK SHIPPING: RATE IMPROVEMENTS ARRIVED AS FORECAST, BUT UNCERTAINTY MOUNTS FOR 2015 DEMAND - BIMCO
BIMCO released its latest short term assessment of the dry bulk market, estimating that over the October-November period, the level of Capesize TC ...
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- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- White Energy Company Limited
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
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