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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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Saturday, 27 September 14
OIL MARKET CONTANGO: SPECULATION ON FUTURE PRICES CAN BE A RISKY MOVE, EVEN FOR TANKER OWNERS HELLENIC SHIPPING NEWS
Despite the fact that tanker owners can easily use their vessels as floating storage units for oil, in a bid to exploit the current oil market dyna ...
Saturday, 27 September 14
MORE COAL MINERS AGREE TO AMEND CONTRACTS - THE JAKARTA POST
The Energy and Mineral Resources Ministry is in a rush to beat a deadline for the conclusion of numerous memorandums of understanding (MoUs) with t ...
Friday, 26 September 14
INDIA SUPREME COURT RULING TO HIT STEEL, UTILITY EARNINGS, SAYS FITCH
COALspot.com: The 24 September Supreme Court of India (SCI) decision to cancel almost every coal block allocation since 1993 will have a negative f ...
Friday, 26 September 14
U.S WEEKLY COAL PRODUCTION FELL 1.8% WEEK OVER WEEK, SAYS EIA
COALspot.com – United States the world's one of largest coal producers, produced approximately 18.80 million short tons (mmst) of c ...
Friday, 26 September 14
ORACLE SIGNS EPC FRAMEWORK AGREEMENT WITH SEPCO FOR COAL MINE AND POWER PLANT IN PAKISTAN
COALspot.com: Oracle Coalfields PLC, the UK developer of a lignite coal mine and power plant in the south-eastern Sindh Province, Pakistan, has ann ...
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- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
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- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Economic Council, Georgia
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- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
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- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- White Energy Company Limited
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
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