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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, 16 June 14
API 8 CFR SOUTH CHINA COAL SWAPS FALL CONTINUES THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 4.34 percent month on month and closed at US$ 71.05 per mt a ...
Sunday, 15 June 14
COAL FREIGHT RATES FALL FURTHER ON LACK OF DEMANDS - CAPT. REDDY
COALspot.com: The BDI softened this week as all segments fell this week. The Panamax sector being most affected. The Cape index was down 3.51 pct w ...
Friday, 13 June 14
US COAL PRODUCTION FELL 3% IN WEEK THAT ENDED JUNE 7, SAYS EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 18.6 million short tons (mmst) of coal in a ...
Friday, 13 June 14
DRY BULK MARKET KEEPS ON FALLING, DESPITE RESPITE OF THE CAPESIZE SECTOR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on its lacklustre performance overall, with the Baltic Dry Index (BDI) still hovering below the 1,000 point mark. Yest ...
Thursday, 12 June 14
INDONESIA SETS HBA FOR MONTH OF JUNE AT US$ 73.64
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has revised up first time in last four months the coal bench mark price. ...
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- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
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- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
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- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
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