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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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Wednesday, 26 March 14
NEWBUILDING ORDERING ACTIVITY PICKS UP PACE ON IMPROVING DRY BULK MARKET CONDITIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The gradual improvement of the dry bulk market, as expected for some time now, is urging shipowners to increase their newbuilding ordering activ ...
Wednesday, 26 March 14
LARGE AMOUNT OF VESSELS CHARTERED TO HAUL IRON ORE CARGOES TO CHINESE BUYERS THIS WEEK - COMMODORE RESEARCH & CONSULTANCY
COALspot.com: Through the first three days of this week, 18 dry bulk vessels have been chartered to haul spot iron ore cargoes to Chinese buyers ...
Wednesday, 26 March 14
JOIN IN THE CLEAN COAL CASE STUDY WITH SINOPEC!
Produced by CDMC Events, The 13th Clean Coal Forum 2014 will be held on June 12,13, 2014 in Beijing, China. We are glad to invite Experts ...
Tuesday, 25 March 14
INDONESIAN SUB-BITUMINOUS COAL SWAP FOR Q2 DELIVERY CLOSED $ 57.40 PMT W/E 21 MARCH 2014
COALspot.com – Indonesia, the world’s largest exporter of the thermal coal's swaps for delivery April - June 2014 gained this pa ...
Tuesday, 25 March 14
NEWCASTLE COAL EXPORTS JUMP 29.16% TO 2.79 MMT WEEK ON WEEK
COALspot.com: In the week ended 24 March 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2.79 ...
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- Sojitz Corporation - Japan
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- Power Finance Corporation Ltd., India
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- Malabar Cements Ltd - India
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- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- South Luzon Thermal Energy Corporation
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- Australian Coal Association
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- Offshore Bulk Terminal Pte Ltd, Singapore
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
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- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- The University of Queensland
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- Cigading International Bulk Terminal - Indonesia
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- Ministry of Finance - Indonesia
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- Indonesian Coal Mining Association
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- Economic Council, Georgia
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- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
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- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
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- Globalindo Alam Lestari - Indonesia
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- White Energy Company Limited
- CNBM International Corporation - China
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- New Zealand Coal & Carbon
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- India Bulls Power Limited - India
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- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
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- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
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- MS Steel International - UAE
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- Formosa Plastics Group - Taiwan
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- Chamber of Mines of South Africa
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- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
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- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
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- Planning Commission, India
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- Wilmar Investment Holdings
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- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
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- Ambuja Cements Ltd - India
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- Dalmia Cement Bharat India
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- Deloitte Consulting - India
- Borneo Indobara - Indonesia
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- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
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- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
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