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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, 05 September 14
U.S. PRODUCED 19.2 MMST OF COAL LAST WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.20 million short tons (mmst) of coal in ...
Thursday, 04 September 14
PUNJAB STATE POWER CORPORATION LIMITED OF INDIA HAS DECIDED TO BUY IMPORTED COAL - HINDUSTAN TIMES
COALspot.com: The Punjab State Power Corporation Limited (PSPCL) has decided to buy imported coal to run its thermal plants, as reported by Hindust ...
Thursday, 04 September 14
INDONESIAN COAL MINERS MAY GET MORE TIME ON ROYALTIES - FITCH RATINGS
COALspot.com: Fitch Ratings says that coal miners in Indonesia are likely to get more time to repay the government the royalties that were set off ...
Thursday, 04 September 14
INDONESIAN COAL SWAPS SLIDE THIS PAST WEEK
COALspot.com: Indonesian coal swaps for average October 2014 decreased US$ 0.90 (-1.68%) day on day and US$ 1.80 (-3.31%) per mt week on week. The ...
Thursday, 04 September 14
CAPESIZE : SENTIMENT REMAINS POSITIVE FOR Q3/Q4 - FEARNRESEARCH
Handy
The Atlantic market has experienced more activity this week. Rates for TA´s are up about 8% w-o-w, much lead by an increasing number ...
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- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- The University of Queensland
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
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