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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, 02 May 14
US WEEKLY COAL PRODUCTION RELATIVELY FLAT AT -0.1%, SAYS EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 19.0 million short tons (mmst) of coal i ...
Friday, 02 May 14
DRY BULK MARKET SHOWING SIGNS OF COMEBACK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market which has been hovering below the 1,000-point market (BDI) during the past couple of weeks, could be exhibiting signs of a s ...
Thursday, 01 May 14
INDONESIA EXPORT BAN POINTS TO QUESTIONS OVER CHINA'S LONG-TERM BAUXITE SUPPLY - WOOD MACKENZIE
China’s Bauxite demand forecast to reach 240 million tonnes by 2030
In light of the Indonesian mineral ore ban that came into force o ...
Thursday, 01 May 14
DRY BULK MARKET STILL REELING UNDER PRESSURE FROM VARIOUS FACTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market's revival is still overdue, as the industry's benchmark, the BDI is still lagging below the 1,000-point mark. In fac ...
Wednesday, 30 April 14
FREIGHT MARKET FOR DRY BULKERS STILL REMAINS WEAK - INTERMODAL
One week after the Easter holiday and the celebration for the resurrection of Christ, everybody expected to see a similar sign of a revival in t ...
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- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Siam City Cement - Thailand
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- White Energy Company Limited
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
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