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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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Friday, 23 May 14
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DRY BULK NEWBUILDING CANCELLATIONS COULD HELP SUPPORT MARKET IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
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CAPESIZE : RATES ARE STILL UNDER PRESSURE
Handy
A quiet start into the week in Far East, some fresh Indonesian coal order in the market. For trips within S.E. Asia, Supras are trading aro ...
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- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- White Energy Company Limited
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Australian Coal Association
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Planning Commission, India
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
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