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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, 12 June 14
HANDY : TA MARKET IS CONTINUING SOUTH WITH A DECREASE OF 26% W-O-W
Handy
The week started off with holidays in most European countries and the TA market is continuing south with a decrease of 26% w-o-w. We do see ...
Thursday, 12 June 14
CONSOLIDATION IS THE ' NAME OF THE GAME' WHEN IT COMES TO SHIPYARDS ACROSS ASIA - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Intense competition, a swelling of new greenfield shipyards over the past few years mainly in China, especially prior to the 2008 global financial ...
Wednesday, 11 June 14
INDONESIA'S COAL EXPORT VOLUME AND REVENUE SLIPS 2.75% AND 6.73% RESPECTIVELY IN APRIL
COALspot.com: Indonesia, one of the world's largest coal producer and the global largest multi grade coal exporter shipped around $1.8* b ...
Wednesday, 11 June 14
BPI TOUCHING A NEW LOW FOR THE YEAR
The Dry Bulk market closed off the week positively, on the back of firming Capesize rates, while the market overall continues to face a very challe ...
Monday, 09 June 14
GOVT GETS TOUGH ON ILLEGAL MINING, SUSPENDS LICENSES - THE JAKARTA POST
The government has temporarily suspended the licenses of 62 mineral and coal transportation companies as part of its efforts to curb illegal mining ...
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- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
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