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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, 14 April 14
CHINA'S MEASURES TO STIMULATE ECONOMY'S GROWTH COULD OFFER ROOM FOR STABILITY IN SHIPPING MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Since the outbreak of the 2008-crisis, the shipping industry, in most of its aspects, i.e. dry bulk and tanker markets alike, has been dealing w ...
Sunday, 13 April 14
INDONESIA TO INDIA FREIGHT MARKET DECLINE CONTINUES
COALspot.com: The freight market continued to drop this week and BDI almost touched 1000 points. BDI closed at 1002 points fell 16.85 pct week o ...
Saturday, 12 April 14
HOW DO YOU CALCULATE LOSS OF EARNINGS FOLLOWING A COLLISION? - INCE & CO
KNOWLEDGE TO ELEVATE
The recent case of Astipalaia vs Hanjin Shenzhen [2014] EWHC 120 (Admlty) has revisited the existing case law on asses ...
Friday, 11 April 14
US COAL PRODUCTION IN MARCH INCREASED 9.69% TO 82.6 MMST MONTH ON MONTH
COALspot.com – United States the world's second largest coal producer, produced approximately 19.10 million short tons (mmst) of coal ...
Thursday, 10 April 14
DRY BULK MARKET IS RISING CLAIMS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the recent fall of the Baltic Dry Index (BDI), when one compares the first quarter of 2014, to similar quarters of the recent past, it i ...
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- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- The University of Queensland
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
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