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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, 26 May 14
SUB-BIT FOB INDO COAL SWAP Q1' 15 DELIVERIES CLOSED AT US$ 59.40 PER MT
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, 26 May 14
Q3 14 CFR SOUTH CHINA COAL SWAPS LOST 2.24% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.24 percent month on month and closed at US$ 73.88 per mt as on F ...
Monday, 26 May 14
NEWBUILDING ORDERING ACTIVITY RISES BY 78% IN DWT TONNAGE OVER THE FIRST 4 MONTHS OF THE YEARS, AS OWNERS INVEST$40.5 BN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have plunged into newbuilding orders during the first four months of the year, as overall newbuilding business ended for the first four ...
Sunday, 25 May 14
FREIGHT RATES FROM SOUTH KALIMANTAN TO EAST COAST INDIAN PORTS WERE ASSESSED AT $9.50/MT
COALspot.com: The BDI was closed at 964 points down by 6.13 pct week on week. The Cape Index was lost 172 points or 11.24% week on week and closing ...
Saturday, 24 May 14
DRY BULK MARKET'S RECOVERY IS JUST AROUND THE CORNER SAYS SHIPOWNER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the weaker than expected market sentiment in the dry bulk market over the course of the past few months, analysts and shipowners alike appe ...
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- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Trasteel International SA, Italy
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
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