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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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Tuesday, 04 March 14
AUSTRALIA'S NPC TO SHIP 11.85 MMT OF COAL IN MARCH
COALspot.com: In the week ended 3 March 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 3.15 m ...
Tuesday, 04 March 14
HIGHER PRICES AND STEADY FREIGHT RATES LEAD SHIP OWNERS TO TEMPORARILY HALT SECOND HAND VESSEL PURCHASES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the dry bulk market has kept on improving, but at a very slow rate, ship owners have elected to take a step back from the flurry of the S&P m ...
Monday, 03 March 14
SUB-BIT INDONESIA COAL SWAP (FOB) FOR AVERAGE Q115 CLOSED AT $60.28, $ 1.70 HIGHER THAN 2Q14
COALspot.com – Indonesia, the world’s largest exporter of the thermal coal's swaps for delivery April - June 2014 slightly corrected do ...
Monday, 03 March 14
API 8 CFR SOUTH CHINA SWAPS: Q4' 2014 DELIVERY CLOSED US$ 1.40 HIGHER COMPARED TO Q2' 2014 DELIVERY
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 1.90 percent month on month and closed at US$ 76.27 per mt as on Fr ...
Monday, 03 March 14
COSTS LIABILITY PASSING DOWN A CHARTERPARTY CHAIN - SKULD
KNOWLEDGE TO ELEVATE
Provided that charterparties are on back to back terms, and the claim is successful, liability for costs incurred shoul ...
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- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
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