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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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Wednesday, 23 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
In Australia, the world’s largest mining group, BHP Billiton, will beat the iron ore export target of more than 220 million tonnes for 2014. ...
Wednesday, 23 July 14
HARD COAL 2013: THE WORLD'S SECOND-MOST IMPORTANT ENERGY SOURCE AND GUARANTOR FOR THE SECURITY OF ENERGY SUPPLIES DURING TIMES OF CRISIS
Hard coal is again in 2013 the fastest-growing fossil primary energy source in the world. As shown in the BP Statistical Review 2014, it covered ab ...
Tuesday, 22 July 14
INDONESIAN ELECTION RESULT ENCOURAGING FOR FOREIGN INVESTMENT IN ENERGY AND MINING SECTORS - WOOD MACKENZIE
Joko Widodo-Jusuf Kalla has been announced as the official winner of Indonesia's presidential election. Joko Widodo, or Jokowi, is viewed as a ...
Tuesday, 22 July 14
THE CURRENT COAL PRICES ARE UNPROFITABLE FOR MINERS; COAL PRICES WILL GRADUALLY INCREASE - FITCH
COALspot.com: The Fitch Ratings expect the benchmark Newcastle coal prices (currently at about USD70/MT) to gradually increase.
Fitch's la ...
Tuesday, 22 July 14
SUB-BIT FOB INDONESIA COAL Q3' 14 DOWN 5.21%; Q4' 14 DOWN 3.56%; Q1' 15 DOWN 4.75% M-O-M
COALspot.com: Indonesian coal swaps for average Q3’ 2014 flat on day, weak week on week and on month according to AsiaClear OTC coal swap' ...
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- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
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