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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, 12 March 14
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KNOWLEDGE TO ELEVATE
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INDONESIAN SUB-BITUMINOUS COAL SWAPS CONTINUES TO FALL
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Monday, 10 March 14
API 8 CFR SOUTH CHINA COAL SWAPS LOST 4.28 PERCENT MONTH ON MONTH FOR Q2 DELIVERY
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- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
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- Bhatia International Limited - India
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- Independent Power Producers Association of India
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- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
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- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
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- New Zealand Coal & Carbon
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- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
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- Wilmar Investment Holdings
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- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
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- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
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- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
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- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
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- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
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- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
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- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Australian Coal Association
- Economic Council, Georgia
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- The University of Queensland
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
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- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
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