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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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Friday, 21 March 14
MERCURIA ANNOUNCES ACQUISITION OF J.P. MORGAN PHYSICAL COMMODITIES BUSINESS
COALspot.com: Mercuria Energy Group announced that it has reached a definitive agreement with J.P. Morgan Chase & Co. to acquire its physica ...
Thursday, 20 March 14
CAPESIZE: WEST AUSTRALIA TO CHINA RATES HAVE CLIMBED BACK TOWARD USD 11 PMT - FEARNRESEARCH
Handy
From a slight improvement in the Atlantic to a more mixed picture this mid week. North Atlantic rounds showing softening signs whereas S ...
Wednesday, 19 March 14
INSTEAD OF DECIDING WHETHER THE GLASS IS HALF FULL OR HALF EMPTY, I AM CURRENTLY GLAD THERE IS WATER IN THE GLASS - EVA TZIMA
By Eva Tzima
Research Analyst
Intermodal Research & Valuations
Right when you think that you have all your facts straight, right wh ...
Wednesday, 19 March 14
EUROCOKE SUMMIT 2014
Press Release: ThyssenKrupp, Steel Institute VDEh, SSI and more headline Smithers Apex’s Eurocoke Summit
The leading coke, coal and s ...
Wednesday, 19 March 14
DRY BULK MARKET REBOUND LEADS TO MORE NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The steady rise of the dry bulk market, as evidenced by the return, yesterday, of the Baltic Dry Index above the 1,500-point mark (1,518), is fu ...
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- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- MS Steel International - UAE
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Aditya Birla Group - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Australian Coal Association
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
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