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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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Thursday, 08 May 14
'TRIAL BY MEDIA, TRIAL BY LAW' - A REPORT FROM TRACK 1 OF BIMCO'S ANNUAL CONFERENCE DUBAI 2014
KNOWLEDGE TO ELEVATE
Aiming to bring a very different type of event into their annual conference, BIMCO presented ‘Double Jeopardy &n ...
Thursday, 08 May 14
INDONESIAN COAL PRICE REFERENCE IN MAY CRASHES THROUGH $74
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has revised down again the coal bench mark price by US$ 1.21 / MT to ...
Wednesday, 07 May 14
THE DRY BULK MARKET HAS NOTED ANOTHER WEEKLY POSITIVE GAIN
Chartering (Wet: Softer- / Dry: Stable+)
The Dry Bulk market has noted another weekly positive gain, driven by the Capesize segment, but we ne ...
Wednesday, 07 May 14
SGX ENHANCES ITS COMMODITIES PRODUCT OFFERING
COALspot.com: SGX is building up its bulk commodity product offerings with 9 more derivative contracts over the next 2 months, subject to regula ...
Tuesday, 06 May 14
NEWCASTLE COAL EXPORT SLIPS 7.92% WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 5 May 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland ...
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- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- VISA Power Limited - India
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
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