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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, 19 June 14
PANAMAX: VERY CLOSE TO BREAKING THE ALL TIME LOW RECORD - FEARNLEYS AS
Handy
The Supra-Handy market is experiencing the same market slow down as its bigger sister markets however not to the same extent. We see TA rat ...
Wednesday, 18 June 14
CHINESE STEEL PRODUCTION SETS RECORD DURING FIRST TEN DAYS OF JUNE - COMMODORE RESEARCH & CONSULTANCY
Recently released data shows that average daily crude steel production at China's key steel mills hit a record high of 1.833 million tons durin ...
Wednesday, 18 June 14
MARKET INSIGHT - TIMOS PAPADIMITRIOU
Back in January the expectations for Q3 and Q4 were more than great. Talks and claims for a rising BDI and a healthy market were coming from everyw ...
Tuesday, 17 June 14
DRY BULK FREIGHT RATES TO RISE DURING THE SECOND HALF OF 2014, AS CHINA IS EXPECTED TO START IMPORTING MORE IRON ORE FROM BRAZIL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its latest analysis of the dry bulk market, BIMCO said that it doesn’t expect freight rates to react significantly to increased demand bef ...
Monday, 16 June 14
INDONESIAN COAL SWAPS FOR Q3 DELIVERY FALL 2.34 % MONTH ON MONTH
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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- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Ambuja Cements Ltd - India
- Australian Coal Association
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
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