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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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Friday, 11 July 14
UNITED STATE'S MONTHLY COAL OUTPUT FALLS 5.53% IN JUNE
COALspot.com – United States the world's second largest coal producer, produced approximately 18.1 million short tons (mmst) of coal in a ...
Thursday, 10 July 14
SGX EXPANDS ACROSS THE BULKS WITH NEW COAL PRODUCTS
COALspot.com: Singapore Exchange (SGX) is expanding its bulk commodity derivatives offering by launching new coking and thermal coal products on 4 ...
Thursday, 10 July 14
HANDY: SMALL INCREASE; PANAMAX: POSITIVE TONE; CAPESIZE: PAPER VALUES REMAIN WEEK
Handy
It is a general increase in activity in both hemispheres whereas rates have just experienced a small increase. In the Feast we see stable a ...
Wednesday, 09 July 14
SHIP INVESTMENTS ARE TRENDING LOWER
Most ship owners are deeming current ship prices on the high side, refraining from making serious commitments in new acquisitions or newbuilding or ...
Wednesday, 09 July 14
INDIAN GOVERNMENT ADVISED POWER UTILITIES TO INCREASE COAL IMPORTS
COALspot.com: The government of India has advised power utilities to increase coal imports to meet fuel shortages and those that have fuel supply p ...
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- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- The University of Queensland
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
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