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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, 19 May 14
API 8 CFR SOUTH CHINA COAL LOST 2.49% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.49 percent month on month and closed at US$ 74.35 per mt as on F ...
Sunday, 18 May 14
FREIGHT RATES ARE EXPECTED TO BE FIRM NEXT WEEK
COALspot.com: The freight market was steady with the BDI was closed slightly higher at 1027 points or up 3.00 pct week on week.
The Cape ...
Friday, 16 May 14
KOMIPO IS LOOKING FOR 60K MT OF LOW VOLATILE BITUMINOUS COAL
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 60,000 Metric Tons (MT) of low volatile bitumi ...
Friday, 16 May 14
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 18.9 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Thursday, 15 May 14
PANAMAX : SHORT PERIOD UP TO ONE YEAR REPORTED IN THE 12.000-12.500 RANGE - FEARNRESEARCH
Handy
The Supra and handy market seems to be affected by the recent holidays in Singapore which still relatively quiet. There are some Indo / ...
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- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
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- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
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- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- PTC India Limited - India
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
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- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Planning Commission, India
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
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- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
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