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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, 22 August 14
U.S WEEKLY COAL PRODUCTION UP 2.4% WEEK OVER WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.60 million short tons (mmst) of coal in ...
Thursday, 21 August 14
PREDICTIONS FROM VARIOUS SHIPPERS AND MINING INDUSTRY FOR 2ND HALF YEAR AND ESPECIALLY Q4 IS POSITIVE
Handy
The activity has increased in both hemispheres this week and we see rates edging up on all trades. TA´s are now paying around 8k whic ...
Thursday, 21 August 14
SHIP OWNERS KEEP SHYING AWAY FOR NEW SHIP INVESTMENTS, OVERALL TREND IS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have remained in the sidelines of the Sale & Purchasing market for second hand vessels, during most of August, while they also slow ...
Wednesday, 20 August 14
DRY BULK MARKET TO REBOUND IN THE FOURTH QUARTER, OR NOT....- NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The projected rebound of the dry bulk market is still an elusive trend and shipbrokers and analysts are looking to identify the timing of the loomi ...
Monday, 18 August 14
CAPESIZE RATES TO RISE TO MUCH HIGHER LEVELS THIS YEAR - JEFFREY LANDSBERG
COALspot.com: Capesize rates ended last week at $15,561/day, which marked a week-on-week increase of $6,167 (66%). Capesize rates have been a ...
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- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
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- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
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- Singapore Mercantile Exchange
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- Australian Commodity Traders Exchange
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- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
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- Australian Coal Association
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- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
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- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
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- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Standard Chartered Bank - UAE
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- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
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- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
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- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Planning Commission, India
- Indogreen Group - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
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