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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, 07 April 14
WEEKLY SUB-BIT FOB INDONESIA COAL SWAP CLAIMS EDGE FALL; TREND NEGATIVE
COALspot.com: Indonesian coal swaps for average Q4’ 2014 lost on month, day and on week according to AsiaClear OTC coal swap's reports ...
Monday, 07 April 14
API 8 CFR SOUTH CHINA COAL SWAPS GAINED 2.09% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries gained 2.09 percent month on month and closed at US$ 75.68 per ...
Sunday, 06 April 14
THE FREIGHT MARKET KEEPS SLIDING
COALspot.com: The freight market continued to drop this week. The BDI (Baltic Dry Index) is a widely followed metric that reflects the overall r ...
Friday, 04 April 14
UNITED STATES COAL OUTPUT UP 5.4% IN PAST WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.9 million short tons (mmst) of coal i ...
Thursday, 03 April 14
PANAMAX SECTOR IS WATCHING A SEVERE DROP IN RATES - FEARNLEYS
Handy
A further weaker sentiment for the Supras as well in both hemispheres this week with oversupply of tonnage being the major headline. Tra ...
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- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
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- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
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- TeaM Sual Corporation - Philippines
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- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
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- Global Coal Blending Company Limited - Australia
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- Indian Oil Corporation Limited
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- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
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- Australian Coal Association
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- The Treasury - Australian Government
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- Georgia Ports Authority, United States
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- CNBM International Corporation - China
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- Power Finance Corporation Ltd., India
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- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
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- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Parliament of New Zealand
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- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
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- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
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- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
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- Wilmar Investment Holdings
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- Metalloyd Limited - United Kingdom
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- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
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- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
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