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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, 21 April 14
DRY BULK MARKET UPS AND - MOST RECENTLY - DOWNS OFFERS NO ROOM FOR RELAXING AMONG DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market's latest demise, with the market retrating once again, since the end of March, has come at a time, when most ship owners ...
Sunday, 20 April 14
FREIGHT RATES END WEEK ON WEAK NOTE - VISTAAR
Wish you all Happy Easter.
The freight market continued to its downwards as BDI was fell 7.187 percent to 930 points week on week.
The ...
Friday, 18 April 14
US WEEKLY COAL PRODUCTION DECLINED BY 1% TO 18.9 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Thursday, 17 April 14
DRY BULK MARKET ON RETREAT MODE, WHILE NEWBUILDING ORDERING ACTIVITY STALLS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on retreating this week, a pattern which emerged since late March. Yesterday the BDI (Baltic Dry Index) ended yet a ...
Wednesday, 16 April 14
INDONESIA'S FEBRUARY 2014 COAL EXPORT VOLUME FELL 2.41%
COALspot.com: Indonesia, the world 4th largest coal producer and the global largest multi grade coal exporter shipped around $1.77* billio ...
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- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- The University of Queensland
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
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