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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, 12 May 14
TAIPOWER TO IMPORT AROUND 1 MMT OF SUB-BITUMINOUS COAL DURING AUGUST 2014 THROUGH NOVEMBER 2014
COALspot.com - Taiwan Power Company intends to procure 1.050 million tons of sub-bituminous coal for Taipower thermal power plant through open t ...
Monday, 12 May 14
DRY BULK MARKET IS STILL STRUGGLING TO FIND FIRM FOOTING
COALspot.com: The freight market continued to be weak and the BDI closed slightly lower at 997 points or fell 1.96 pct week on week. The cape in ...
Friday, 09 May 14
RBCT SHIPPED 5.4 MMT OF COAL IN APRIL
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest coal export terminal in the world, shipped 5.45 million to ...
Friday, 09 May 14
DRY BULK MARKET: BANKRUPTCY TONNAGE UNLEASHED
Drewry’s latest Dry Bulk Forecaster saw freight rates on most routes declined in 2014’s first quarter as the previous quarter’ ...
Friday, 09 May 14
UNITED STATES COAL PRODUCTION SLIGHTLY SLIDES TO 82.4 MMST IN APRIL
COALspot.com – United States the world's second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal i ...
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- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
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- Singapore Mercantile Exchange
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- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
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- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
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- Tamil Nadu electricity Board
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- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Minerals Council of Australia
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
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- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- MS Steel International - UAE
- VISA Power Limited - India
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
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- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
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