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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, 05 May 14
HUANENG CLEAN ENERGY RESEARCH INSTITUTE HAS CONFIRMED TO SPEAK AT CCF2014
Press Release: Produced by CDMC Events, The 13th Clean Coal Forum 2014 will be held on June 12,13, 2014 in Beijing, China. We are glad to invite ...
Monday, 05 May 14
SUB BIT-FOB INDONESIA COAL SWAPS LOST GROUND LAST WEEK
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports ...
Monday, 05 May 14
API 8 CFR SOUTH CHINA COAL SWAP FOR AVERAGE Q3 14 DELIVERIES: LOST 0.82% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 0.82 percent month on month and closed at US$ 75.20 per mt as o ...
Sunday, 04 May 14
INDONESIA TO INDIA FREIGHT RATES ARE SHOWING POSITIVE TREND
COALspot.com: The freight market is seems to be some recovery as cape index has increased by 7.84 pct week on week. Cape index closed at 1829 po ...
Friday, 02 May 14
ADARO ENERGY STARTS YEAR 2014 WELL DESPITE CURRENT MARKET CONDITIONS
COALspot.com: Adaro Energy, the second largest Indonesian coal miner's revenue increased 14% to US$ 845 million due to higher sales volume, ...
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- Commonwealth Bank - Australia
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- Coal and Oil Company - UAE
- Petron Corporation, Philippines
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- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
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- Binh Thuan Hamico - Vietnam
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- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
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- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
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- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
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- Marubeni Corporation - India
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- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
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- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
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- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
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- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- McConnell Dowell - Australia
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- Electricity Authority, New Zealand
- White Energy Company Limited
- PowerSource Philippines DevCo
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Interocean Group of Companies - India
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
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- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
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- Eastern Energy - Thailand
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- Eastern Coal Council - USA
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- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
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