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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, 19 September 14
PRICES FOR DRY BULK CARRIERS HAVEN'T CORRECTED ENOUGH, DESPITE LOWER THAN EXPECTED FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A lot has been said and written about the looming dry bulk market recovery over the past few months. However, even if this hasn’t been materi ...
Thursday, 18 September 14
INDONESIA'S JULY COAL EXPORT VOLUME DROPPED 5.13% M-O-M
COALspot.com: Indonesia, one of the world's largest coal producer and the global leading multi grade coal exporter shipped around $1.65* ...
Thursday, 18 September 14
PANAMAX : US GULF/CHINA FRONTHAUL ARE NOW PAYING TYPICALLY 14.5K + 450K BB - FEARNRESEARCH
Handy
We still see a firming tendency in the Atlantic and it is still ECSA and USG leading on. USG/Cont now up in about USD 17/18k for a Smax whi ...
Thursday, 18 September 14
ELECTRONIC BILLS OF LADING: A GUIDE TO PAPERLESS TRADING WHICH HAS TAKEN THE SHIPPING INDUSTRY BY STORM
Bimco has recently developed and published a charter party clause that specifically addresses the use of electronic bills of lading. Increasing use ...
Wednesday, 17 September 14
PANAMAX: LIMITED INTEREST IN BOTH BASINS; RISING TONNAGE - INTERMODAL
With the week starting off at a fast pace and with the positive momentum from the previous Friday seemingly sticking around for a bit longer, most ...
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- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
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- Ministry of Mines - Canada
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- Port Waratah Coal Services - Australia
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- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
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- MS Steel International - UAE
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- Coal and Oil Company - UAE
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- Australian Coal Association
- Georgia Ports Authority, United States
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- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
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- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
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- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
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- VISA Power Limited - India
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
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- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
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- Metalloyd Limited - United Kingdom
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- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
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- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
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- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
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- Indika Energy - Indonesia
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- India Bulls Power Limited - India
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- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
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- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
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- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
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- Antam Resourcindo - Indonesia
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- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Parliament of New Zealand
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- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
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