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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, 30 January 14
JPU SETTLEMENT PRICE AS A BENCHMARK WILL DECLINE IN IMPORTANCE BUT REMAIN RELEVANT, SAYS WOOD MACKENZIE
JPU price will remain above spot, trending closer to spot till 2015 then increasing to 2035.
Japanese Power Utilities (JPU) are approaching a cru ...
Thursday, 30 January 14
PANAMAX MARKET IS SOFTENING ON LESS ACTIVITY IN BOTH HEMISPHERES - FEARNRESEARCH
Handy
In the Atlantic rates have been slowly sliding but ows can still achieve decent money for TArv´s. USG positions still being fixed in re ...
Thursday, 30 January 14
TANKER PROFITABILITY IS THE 'MILLION-DOLLAR' QUESTION FOR SHIP OWNERS THIS YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The tanker market conditions are expected to remain challenging throughout the year for tanker owners, but even more pressing will be the issue of a ...
Tuesday, 28 January 14
GLOBAL COKING AND STEAM COAL PRODUCTION HAVE GROWN 2% TO 3% TO ABOUT 7.1 BILLION TONNES AS OF THE END OF 2013 - VDKI
COALspot.com (Press Release): Initial figures on the world hard coal market at the VDKi ((Association of Coal Importers - German) New Year’s R ...
Tuesday, 28 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS JUMP 13.75% WEEK ON WEEK
COALspot.com: In the week ended 27 January 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
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- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Australian Coal Association
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Planning Commission, India
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- The University of Queensland
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
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