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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, 24 March 14
SGX'S Q2'14 CFR SOUTH CHINA COAL SWAP CLOSES SLIGHTLY HIGHER W-O-W
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 1.81 percent month on month and closed at US$ 74.82 per mt as o ...
Sunday, 23 March 14
THE COAL FREIGHT RATES SEEN SLIGHTLY FIRMING UP THIS WEEK - REDDY
COALspot.com: The freight market firmed up this week. BDI was up 8.26 pct week on week and index was closed at 1599 points. The Cape index was u ...
Saturday, 22 March 14
SHIP OWNERS INVEST $15 BILLION FOR NEWBUILDINGS AND SECONDHAND VESSELS DURING FEBRUARY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have kept on their aggressive stance in the investment scene both for newbuildings, as well as for secondhand vessels globally durin ...
Friday, 21 March 14
DRY BULK MARKET STAYS ON RECOVERY MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has reached new year heighs, as a result of renewed Capesize demand. The Baltic Dry Index (BDI) ended yesterday's sessio ...
Friday, 21 March 14
US COAL PRODUCTION UP 1.5%; WEST MISSISSIPPI COAL PRODUCTION DOWN 1.85% WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.0 million short tons (mmst) of coal i ...
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- ICICI Bank Limited - India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Australian Coal Association
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- White Energy Company Limited
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
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