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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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Thursday, 27 February 14
SHIPPING LOANS WORTH $5 BILLION HAVE CHANGED HANDS OVER THE PAST YEAR, AS FUNDS INVEST IN SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Funds investing in shipping has been the "talk of the town" over the past couple of years, as institutional investors, private equity and ...
Thursday, 27 February 14
NEWCASTLE COAL EXPORTS SLIP 26.68 PERCENT WEEK ON WEEK
COALspot.com: In the week ended 24 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2. ...
Wednesday, 26 February 14
SMALLER SIZE SEGMENTS HOLDING ON TO THEIR LEVELS; CAPES CORRECTING UPWARDS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable+)
The Dry Bulk market continued to improve this past week, on the back of rates for the smaller size s ...
Tuesday, 25 February 14
GBCE, A COAL UPGRADING TECHNOLOGY DEVELOPER, APPOINTS RICHARD BULMAN AS PROJECT DIRECTOR
Press Release: GB Clean Energy Ltd. (GBCE) announced today the appointment of Richard Bulman as Project Director. In this capacity Mr. Bulman ...
Tuesday, 25 February 14
ULTRAMAXES ARE THE 'WEAPON OF CHOICE' FOR DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's been a busy start in 2014, as the first month of the year was a rather active in terms of second hand vessel purchases and newbuilding orderin ...
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- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Australian Coal Association
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Economic Council, Georgia
- PTC India Limited - India
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
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