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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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Thursday, 26 June 14
COAL DIVESTMENT CAMPAIGNS COME WITH RISKY UNINTENDED CONSEQUENCES - WCA
Last week I presented to the Expert Group on investments in coal and petroleum companies, the body set up to advise the Norwegian Government on whe ...
Wednesday, 25 June 14
INDONESIAN COAL EXPORTS ON RISE; EARNINGS FALL ON LOWER SELLING PRICES
COALspot.com: Indonesia, one of the world's largest coal producer and the global largest multi grade coal exporter shipped around $1.84* ...
Wednesday, 25 June 14
THE PANAMAX MARKET REACHED FRESH LOWS FOR THE YEAR, SAYS INTERMODAL
COALspot.com: The Dry Bulk market closed off the week noting a slight decrease, but this image of stability is merely representative of freight rat ...
Wednesday, 25 June 14
SHIPPING: MARKET INSIGHT - YANNIS OLZIERSKY
During his recent visit in London, China's Premier, Li Keqiang, announced that China's economy, the world's second largest after the US ...
Tuesday, 24 June 14
INDONESIAN COAL MINER TARGETS RP 313 BILLION IPO
COALspot.com: Indonesian coal miner PT Mitrabara Adiperdana is aiming to raise up to Rp 313 billion to Rp 368 billion (approximately $26.133 millio ...
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- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- White Energy Company Limited
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- The University of Queensland
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Latin American Coal - Colombia
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