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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, 25 April 14
US PRODUCED APPROXIMATELY 19 MILLION SHORT TONS OF COAL IN A WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.0 million short tons (mmst) of coal i ...
Friday, 25 April 14
2ND MYANMAR ELECTRIC POWER CONVENTION 2014 IS THE GATEWAY TO MYANMAR POWER INDUSTRY!
Press Release: 2nd Myanmar Electric Power Convention (MEPC) 2014 is scheduled on 21-23 October, 2014 at Traders Hotel in Yangon, Myanmar. MEPC o ...
Friday, 25 April 14
DRY BULK MARKET LOOKING FOR NEW TRACTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market seems to have gained its footing after the past few dissapointing weeks, during which the Baltic Dry Index (BDI) shedded mos ...
Thursday, 24 April 14
HANDY : A FLOW OF FRESH REQUIREMENTS LIFTING THE PACIFIC SLOWLY TO US$ 10-11 K BSS SINGAPORE FOR COAL ROUNDS
Handy
There is still no place to hide in the Atlantic for the smaller but flexible sizes. Slow and weak seems to be the headlines, although th ...
Wednesday, 23 April 14
EUROPE WOULD BE HARD PRESSED TO REPLACE RUSSIAN GAS, FITCH RATINGS SAYS
A ban on Russian gas imports to the EU would cause substantial disruption to Europe's economy and industry, Fitch Ratings says. In the immed ...
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- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Economic Council, Georgia
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
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