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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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Sunday, 07 September 14
FREIGHT MARKET CONTINUED TO BE FIRM IN SPITE OF CAPE'S THIS WEEK'S WEAK PERFORMANCE
COALspot.com: BDI up by 0.7 pct week on week and closed at 1155 points this week. The Baltic Dry Index is a composite of three sub-indexes that mea ...
Sunday, 07 September 14
SHIPMANAGERS SUPERVISION CONTRACT FOR NEWBUILDS - BIMCO
Shipmanagers are frequently called upon by their owner clients to supervise newbuilding projects on their behalf. The scope of the manager’s ...
Saturday, 06 September 14
SLOW COAL EXPORT REGISTRATION RAISES CONCERNS - THE JAKARTA POST
Several coal mining companies have yet to receive the go-ahead from the Energy and Mineral Resources Ministry to obtain exporting licenses, leading ...
Saturday, 06 September 14
DRY BULK MARKET'S PROSPECTS ARE IMPROVING, DESPITE WEAK SECOND QUARTER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been rebounding during the past month, with the Baltic Dry Index (BDI) ended the week on a high note, reaching 1,155 points ...
Saturday, 06 September 14
INDONESIA WANTS TO REGULATE COAL DEALS - THE TELEGRAPH INDIA
Indonesia has raised concerns about suspected coal deals struck between overseas buyers and its unregistered domestic miners, the telegraph India r ...
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- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Australian Coal Association
- White Energy Company Limited
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- PTC India Limited - India
- Central Java Power - Indonesia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
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