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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, 25 February 14
SGX'S MONTHLY VOLUMES DRASTICALLY INCREASED AND REACHED A RECORD OF 810K TONNES YEAR-ON-YEAR
COALspot.com: SGX Thermal Coal derivatives started the new year with record volumes in January on the back of higher volatility, says SGX.
Accord ...
Monday, 24 February 14
DRY BULK MARKET TO IMPROVE OVER THE COURSE OF 2014, BUT OVERSUPPLY STILL AN ISSUE SAYS BIMCO'S CHIEF SHIPPING ANALYST
As a gruelling first quarter edges closer to the end, dry bulk ship owners are looking at an improved second quarter demand, which, coupled with slo ...
Monday, 24 February 14
INDONESIAN SUB-BITUMINOUS COAL SWAP FOR DELIVERY APRIL - JUNE 2014 SLIDES TO $ 58.60 PMT
COALspot.com – Indonesia, the world’s the largest exporter of the thermal coal's swaps for delivery April - June 2014 slide week ended ...
Monday, 24 February 14
Q1 2015 DELIVERY COAL SWAP CLOSED AT 2.62% HIGHER THAN Q2 2014 CLOSING SWAPS
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 2.68 percent month on month and closed at US$ 76.20 per mt as on Fr ...
Saturday, 22 February 14
SHIPPING POISED TO RALLY AFTER SEVERAL WEEKS OF DROP
COALspot.com: The freight market was steady to firm with the dry bulk index up by 6.24 pct closing at 1,175 points week on week and the cape index w ...
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- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Bhatia International Limited - India
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Australian Coal Association
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
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