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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, 04 July 14
US: WEEKLY COAL PRODUCTION SLIGHTLY UP W-O-W
COALspot.com – United States the world's second largest coal producer, produced approximately 19.4 million short tons (mmst) of coa ...
Friday, 04 July 14
PARAM MITRA COAL RESOURCES SECURES US$ 7.5M INVESTMENT FROM TEMBUSU PARTNERS
Param Mitra Coal Resources Pte Ltd (“PMCR”), which owns two operating coal mines in Indonesia, has secured from Singapore private equit ...
Thursday, 03 July 14
BUMI TRANSFERS 19% OF KPC STAKE VALUED AT US$ 950 MILLION TO CIC
COALspot.com: PT. Bumi Resources announces that 19% of its holdings in Kaltim Prima Coal (KPC), valued at US$ 950 million, has been transferred to ...
Thursday, 03 July 14
PANAMAX : IN THE ATLANTIC, OWNERS ARE WILLING TO FIX AT ABOUT $2.5K PER DAY - FEARNEYS
Handy
In its latest weekly report, shipbroker Fearneys noted that, this week seems to have been more of a wait and see game between owners and ch ...
Wednesday, 02 July 14
NEWMONT FILES FOR INTERNATIONAL ARBITRATION ON ORE EXPORT BAN - THE JAKARTA POST
PT Newmont Nusa Tenggara (NNT), a subsidiary of United States-based Newmont Corporation, has filed for international arbitration against the govern ...
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- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Central Electricity Authority - India
- Posco Energy - South Korea
- Economic Council, Georgia
- The University of Queensland
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
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