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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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Saturday, 22 February 14
POTEN RAISES THE QUESTION OF ACCURACY IN CALCULATING TANKER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the tanker market has grown in complexity over the course of the past few years, the question of whether the traditional methods of assessing rat ...
Friday, 21 February 14
INDONESIA PLAN TO CAP COAL OUTPUT AND HIKE ROYALTY; START MUSIC
COALspot.com: Energy and Mineral Resources Ministy of Indonesia is planning to increase the royalty for coal miners particularly for Mining Business ...
Friday, 21 February 14
THE WORLD'S SECOND LARGEST COAL MINER MINED 19.2 MMST OF COAL IN A WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, mined approximately 19.2 million short tons (mmst) of coal in a w ...
Friday, 21 February 14
DRY BULK MARKET SHOWS SIGNS OF LIFE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has slowly started to emerge from the downfall it's been since the start of the year, as rates have began to pick up over the c ...
Friday, 21 February 14
INDONESIA COAL OUTPUT CAP TO HURT MINERS RELIANT ON VOLUME GROWTH, FITCH SAYS
Fitch Ratings says that the credit profiles of mining sub-contractors and miners highly reliant on increasing volumes to support high debt servicing w ...
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- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
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