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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, 16 July 14
INDIA BUDGET HAS LIMITED SHORT TERM IMPACT ON POWER SECTOR - FITCH RATINGS
Fitch Ratings says that the measures announced relating to India's electricity sector in the budget for FY2015 are directionally correct but in ...
Wednesday, 16 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
Wake me up when September ends - Theodore Ntalakos
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Tuesday, 15 July 14
INDONESIA'S TOTAL COAL PRODUCTION REACHED ANOTHER HIGH DURING THE FIRST SIX MONTHS; GOVERNMENT EXPECTED TO RAISE ROYALTIES
COALspot.com: Indonesia's total coal production reached 213 million tons during January through June, up by 7.6 percent y-o-y. Coal output in I ...
Monday, 14 July 14
THE END OF THE ERA OF HEAVY FUEL OIL IN MARITIME SHIPPING - ICCT
KNOWLEDGE TO ELEVATE
Since the 1960s, heavy fuel oil (HFO) has been the king of marine fuels. Viscous, dirty, yet inexpensive and widely avail ...
Monday, 14 July 14
SGX SUB-BIT FOB INDONESIA COAL SWAP FOR Q4' 14 DELIVERY CLOSED AT $ 54.80
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
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- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Australian Coal Association
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Economic Council, Georgia
- GMR Energy Limited - India
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
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