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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, 18 August 14
SUB-BIT FOB INDONESIA COAL SWAP CLOSED AT $58.60 FOR SEPTEMBER 2015; UP $4 FROM SEPTEMBER 2014 CLOSING
COALspot.com: Indonesian coal swaps for average September 2014 decreased US$ 0.15 (-0.27%) day on day and US$ 0.75 (-1.36%) per mt week on week. Th ...
Monday, 18 August 14
CFR SOUTH CHINA COAL SWAP PERFORMED WELL THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for delivery in September 2014 increased US$ 0.45 (+0.66%) day on day and US$ 0.30 (+0.44%)&nbs ...
Saturday, 16 August 14
HIGH DEMAND OF IRON ORE SHIPMENTS PUSHED CAPE INDEX UPWARDS
COALspot.com: This week's freight market was buoyant with Cape and panamax index seeing a big jump pushing the BDI above 1,000 points week on c ...
Friday, 15 August 14
5TH ANNUAL POWER AND ELECTRICITY INDONESIA
5TH ANNUAL POWER AND ELECTRICITY INDONESIA
13-16 October 2014
Grand Hyatt Jakarta, Indonesia
Web Site
The country’s definitive ...
Thursday, 14 August 14
U.S. STEAM COAL IMPORTS REMAIN DOWN SHARPLY FROM HISTORIC HIGH IN 2007, SAYS EIA
COALspot.com: U.S. steam coal imports at power plants have fallen significantly from their peak level of more than 30 million tons in 2007 to less ...
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- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
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- White Energy Company Limited
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- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
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- Latin American Coal - Colombia
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- Vedanta Resources Plc - India
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- Goldman Sachs - Singapore
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
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- Eastern Coal Council - USA
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- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
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- GAC Shipping (India) Pvt Ltd
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- Chamber of Mines of South Africa
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- Planning Commission, India
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- Minerals Council of Australia
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- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
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- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
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- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Aditya Birla Group - India
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- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Ministry of Mines - Canada
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- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
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- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
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- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
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- New Zealand Coal & Carbon
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- Energy Link Ltd, New Zealand
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- The State Trading Corporation of India Ltd
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- VISA Power Limited - India
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- Parliament of New Zealand
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- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Georgia Ports Authority, United States
- London Commodity Brokers - England
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- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
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- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Marubeni Corporation - India
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- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
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- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
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- Carbofer General Trading SA - India
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- Bharathi Cement Corporation - India
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- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- MS Steel International - UAE
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