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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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Friday, 26 September 14
NEWCASTLMAXES ARE THE MOST SOUGHT AFTER VESSELS BY SHIP OWNERS TODAY SAYS VESSELS VALUE
KNOWLEDGE TO ELEVATE
Determining a ship’s fair value can be a very tricky business, especially when you’re the one paying. As such ...
Thursday, 25 September 14
LACK OF COAL BUSINESS PUSHING DOWN PANAMAX EARNINGS IN PACIFIC
Handy
In the Atlantic we see rates steady climbing upwards. More coal cargoes out of USG and USEC are helping the TA market which is up some USD ...
Wednesday, 24 September 14
ADARO AGREED TO REDUCE ITS CONCESSION AREA TO 31,379.8 HECTARES
COALspot.com: PT Adaro Energy Tbk (Adaro Energy) today announced that, PT Adaro Indonesia (AI), its wholly owned subsidiary, entered into a M ...
Wednesday, 24 September 14
CAPESIZE: ACTIVITY IN BOTH BASINS WAS UNIMPRESSIVE
COALspot.com: The end of the week prior seems to have marked the tone for the days that followed, with the Dry Bulk market giving up a significant ...
Tuesday, 23 September 14
MEDCO TO INCREASE ITS COAL PRODUCTION NEXT YEAR
COALspot.com: PT Medco Energi Internasional is looking to increase its coal production next year, supported by the launch of operations at its Duta ...
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- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- The University of Queensland
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
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