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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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Wednesday, 04 June 14
SKULD: DIVERSIFICATION AND A ROBUST BOTTOM LINE
In February, I was delighted to ring in the new policy year with the Skuld team following a solid renewal round and a strong year. 2013 was, in man ...
Monday, 02 June 14
SUB-BIT FOB INDONESIA COAL SWAPS LOST GROUND THIS WEEK
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 ...
Monday, 02 June 14
SOUTH CHINA COAL SWAP WAS SHOWING A POSITIVE MOVE IN Q4, INSTEAD OF THIS WEEK'S WEAK TREND
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 3.39 percent month on month and closed at US$ 72.65 per mt as on F ...
Sunday, 01 June 14
INDO - INDIA SUPRMAX FREIGHT RATES CONTINUED TO DOWN THIS WEEK
COALspot.com: The freight market was soft this past week as all sectors soften particularly Panamax index was lost 129 points or 12.88% week on wee ...
Friday, 30 May 14
CLEAN COAL PROCESSING & CONVERSION ASIA SUMMIT 2014
Clean Coal Processing & Conversion Asia Summit 2014 will be held on Nov 20-21st, 2014 in Jakarta, Indonesia.
With the cooperation of ...
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- Deloitte Consulting - India
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Economic Council, Georgia
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
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