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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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Monday, 03 February 14
SUB-BIT INDONESIA COAL SWAP GAINED WEEK ON WEEK
COALspot.com – Swaps prices gained for thermal coal loading from Indonesia, the world’s largest exporter of the fuel, according SGX.
...
Monday, 03 February 14
API 8 CFR SOUTH CHINA COAL SWAP CONTRACTS FALL
COALspot.com: API 8 CFR South China Coal swaps for average Q1 14 delivery lost 4.71 percent month on month and closed at US$ 78.87 per mt as on Frid ...
Monday, 03 February 14
COAL FREIGHT RATES REMAIN UNDER PRESSURE
COALspot.com: The BDI is fell 50 pct over last one month which seems to be one of the lowest fall in last few years.
The BDI was down by 11 ...
Friday, 31 January 14
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 19.2 MMST W-O-W
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.2 million short tons (mmst) of coal in ...
Friday, 31 January 14
DRY BULK MARKET STILL ON A FALL, EXPECTED TO WORSEN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market is definitely in the doldrums since the start of the year, in what could only be described as a "lost" month for indus ...
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- PTC India Limited - India
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- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
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- Electricity Generating Authority of Thailand
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- Chamber of Mines of South Africa
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- Parry Sugars Refinery, India
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- The Treasury - Australian Government
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- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
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- Bangladesh Power Developement Board
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- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
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- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
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- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
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- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
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- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
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- McConnell Dowell - Australia
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- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
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- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Eastern Energy - Thailand
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- Singapore Mercantile Exchange
- Anglo American - United Kingdom
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- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
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- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
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- Star Paper Mills Limited - India
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- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Videocon Industries ltd - India
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