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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, 30 August 14
INDIAN GOVERNMENT SHOULD TAKE NOTICE: THERMAL COAL IMPORT PRICES EXTREMELY LOW - COMMODORE RESEARCH
COALspot.com: Both Indonesian and Australian thermal coal prices are at the lowest levels seen this decade, with Indonesia's monthly benchmark ...
Saturday, 30 August 14
RECOVERY IN SIGHT FOR THE DRY BULK SHIPPING MARKET - DREWRY SHIPPING CONSULTANTS
Despite weak freight rates so far this year, Dry Bulk shipping earnings are forecast to recover as demand for both major and minor bulk commodities ...
Friday, 29 August 14
U.S. WEEKLY COAL PRODUCTION DROPS 1.3 PERCENT, EIA SAYS
COALspot.com – United States the world's second largest coal producer, produced approximately 19.40 million short tons (mmst) of coal in ...
Friday, 29 August 14
ADARO'S PROFITS SINK FURTHER AMID FALL IN COAL PRICES - JP
Adaro Energy, one of the country’s largest coal miners, has reported a 31 percent drop in net profit in the first half of this year as global ...
Friday, 29 August 14
CHINESE LIGNITE IMPORTS: QUANTITY OVER QUALITY? - CLARKSONS
In the first half of 2014, Chinese seaborne coal imports declined 0.4% y-o-y to 148mt, largely reflecting a 3.3% fall in imports of steam coal. Mea ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Star Paper Mills Limited - India
- Minerals Council of Australia
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- Bukit Asam (Persero) Tbk - Indonesia
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- Energy Development Corp, Philippines
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- Indonesian Coal Mining Association
- Mjunction Services Limited - India
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- Electricity Authority, New Zealand
- India Bulls Power Limited - India
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- Sojitz Corporation - Japan
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- Latin American Coal - Colombia
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- Planning Commission, India
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- The University of Queensland
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- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
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- GAC Shipping (India) Pvt Ltd
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- The Treasury - Australian Government
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- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
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- Ministry of Finance - Indonesia
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- Neyveli Lignite Corporation Ltd, - India
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
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- Electricity Generating Authority of Thailand
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- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
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- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
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- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
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- Indian Oil Corporation Limited
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- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
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- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
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- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
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- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
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- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
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- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
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- Thiess Contractors Indonesia
- PTC India Limited - India
- Romanian Commodities Exchange
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- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
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