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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, 31 July 14
RIO TINTO SELLS MOZAMBIQUE COAL ASSETS FOR US$ 50 MILLION TO INDIA'S ICVL
COALspot.com: Rio Tinto has agreed to sell its Mozambique coal assets for just US$ 50 million to International coal ventures Private limited of Ind ...
Wednesday, 30 July 14
CAPES SEEMED TO BE STRANDED AT THE SAME LEVELS; PANAMAXES MANAGED TO SLIGHTLY REVIVE - INTERMODAL
COALspot.com: The Dry Bulk market took a breath this past week, as both Panamaxes and Supras started to see a small influx of activity, which was j ...
Tuesday, 29 July 14
TOTAL SELLS ITS SOUTH AFRICAN COAL MINING ASSETS TO EXXARO
Total has signed an agreement with Exxaro Resources Ltd for the sale of its 100% stake in Total Coal South Africa (TCSA), its coal-producing affili ...
Tuesday, 29 July 14
GENCO: DRY BULK SHIPPING VALUATIONS NO LONGER ANCHORED TO DISCOUNTED CASH FLOW METHOD - WEIL
KNOWLEDGE TO ELEVATE
Discounted cash flow analysis is a mainstay among the valuation methodologies used by restructuring professionals and bank ...
Tuesday, 29 July 14
SHIP OWNERS' DEMAND OF NEW VESSELS DENTED AS A RESULT OF LOWER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The sharp downward direction of dry bulk freight rates has had a negative impact on investors’ secondhand buying appetite that wait to see th ...
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- Central Electricity Authority - India
- White Energy Company Limited
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
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- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
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- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
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- Sojitz Corporation - Japan
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- Energy Development Corp, Philippines
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- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- The University of Queensland
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Planning Commission, India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
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- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
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- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
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