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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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Thursday, 28 August 14
PANAMAX: OWNERS CAN GET AROUND USD 16000 FOR A FRONTHAUL; PERIOD MARKET - VERY QUIET - FEARNLEYS
Handy
The activity and sentiment is improving in the Atlantic with the general TA rate is up about US$ 800 w-o-w. We see more South American carg ...
Thursday, 28 August 14
BANPU REPORTS HIGHER FIRST-HALF YEAR RESULTS FOR 2014
COALspot.com: Banpu Public Company Limited (BANPU) reports higher first half-year financial results for 2014 having its gross profit increasing 3 p ...
Wednesday, 27 August 14
FREIGHT MARKET: IS THE MARKET IN A RECOVERY MOOD? - GEORGE ILIOPOULOS
Is the market in a recovery mood?
August is typically a time when the shipping industry takes it easy… charter-ers book their requireme ...
Tuesday, 26 August 14
4TH ANNUAL ASIA NICKEL
4th Annual Asia Nickel
19-20 Nov 2014
Grand Hyatt Jakarta, Indonesia
Web Site
Asia’s Premier Nickel Conference
Regulation in ...
Tuesday, 26 August 14
DESPITE LOW DRY BULK RATES, BULKER PRICES ARE STILL HIGH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, August tends to be a month of slow activity in the sale and purchasing market and this year has been no exception. However, as shipb ...
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- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Sojitz Corporation - Japan
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
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