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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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Monday, 30 June 14
WEEKLY CFR SOUTH CHINA COAL SWAPS DECLINE CONTINUES; Q1'15 LOST US$ 4.55 PMT IN A WEEK
COALspot.com: API 8 CFR South China Coal swap for delivery in Q3 fell US$ 5.25 month on month on Friday, dipping under $69 a tone. The CFR South Ch ...
Monday, 30 June 14
INDO - INDIA FREIGHT RATES CONTINUE TO WEAK
COALspot.com: The latest dry Index shows that average all-in spot freight declined, the Panamax and Supramax slipping by 9.11 percent and 4% respec ...
Friday, 27 June 14
DRY BULK MARKET STILL LOOKING FOR UPSIDE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept up its lacklustre performance during the past week, as evidenced by the course of the Baltic Dry Index (BDI). The BDI ...
Thursday, 26 June 14
PANAMAX : A PACIFIC ROUND PAYS AROUND US$ 3K DAILY - FEARNLEYS AS
Handy
In the Atlantic there has been little activity which again has caused rates to slip across all trades. TA´s are now down to US$ 5,500 ...
Thursday, 26 June 14
KOMIPO INVITES BIDS FOR TOTAL 750K MT OF BITUMINOUS COAL FOR 3CY
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) has issued a new tender for supply of total 250,000 MT of bituminous co ...
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- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- White Energy Company Limited
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Posco Energy - South Korea
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
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