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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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Tuesday, 22 July 14
INDONESIA'S MINERAL EXPORT BAN: CHINA UNDER PRESSURE? - CLARKSONS
In January 2014, Indonesia introduced new regulations on exports of unprocessed minerals. Exports of some minerals have been heavily taxed, whilst ...
Tuesday, 22 July 14
ASIAN SUB-BITUMINOUS COAL USERS' GROUP CONFERENCE
Press Release: Registration Open for Fourth Annual Asian Sub-Bituminous Coal Users’ Group Conference
Register today for this year&r ...
Monday, 21 July 14
25% OF INDIA'S POWER PLANTS WERE HAVING SUPER CRITICAL COAL STOCK - COAL AND POWER MINISTER
25% of India’s power plants were having super critical coal stock; power utilities have also been advised to enhance the import of coal - Coa ...
Monday, 21 July 14
INDONESIA'S STATE CONTROLLED COAL MINER BUKIT ASAM ENJOYED HIGHER SELLING PRICE DURING THIS STORMY MARKET
COALspot.com: PT Bukit Asam, the Indonesian government controlled coal miner announced today that, the company has produced 7.70 million tons of co ...
Monday, 21 July 14
CFR SOUTH CHINA COAL Q3 DELIVERY SWAPS LOST 16% SINCE JANUARY 17, 2014
COALspot.com: Coal price falling is continues as the impact oversupply and lower demand. Market is not showing any positive trend in near future.
...
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- Banpu Public Company Limited - Thailand
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- Economic Council, Georgia
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- Energy Development Corp, Philippines
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- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
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- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
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- Energy Link Ltd, New Zealand
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- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
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- The University of Queensland
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- Mintek Dendrill Indonesia
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- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
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- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
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- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Australian Coal Association
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- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
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- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
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- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
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- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
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