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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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Monday, 25 August 14
API 8 CFR SOUTH CHINA COAL SWAP GAINED DAY OVER DAY AND MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in September 2014 increased US$ 0.30 (+0.44%) day on day and decreased US$ 0.20 (- ...
Sunday, 24 August 14
SEA FREIGHT MARKETS STARTING TO LOOK POSITIVE; CAPES DRIVE FREIGHTS HIGHER
COALspot.com: The freight market has strengthen further this week with BDI up 7.19 pct week on week. The BDI was closed at 1,088 points while the B ...
Friday, 22 August 14
INDIAN IRON ORE ROYALTY RISE NOT LIKELY TO HURT STEELMAKERS' MARGINS - FITCH
Fitch Ratings does not expect an increase in India's iron ore royalty rates to have a major impact on the profitability of steel producers in t ...
Friday, 22 August 14
ARBITRATION CLAUSE IN LOU HELD TO REPLACE CHARTERPARTY ARBITRATION CLAUSE
KNOWLEDGE TO ELEVATE
The Claimants had claims for cargo damage against the vessel Owners arising under four bills of lading. The vessel was th ...
Friday, 22 August 14
ICAP ENERGY LAUNCHES GLOBAL COKING COAL DERIVATIVES TRADING
First contract completed and cleared on CME
COALspot.com: ICAP Energy, the energy business of ICAP plc, announces today that it has successful ...
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- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
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