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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, 21 January 14
PORT OF NEWCASTLE SHIPPED SLIGHTLY MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 20 January 14, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2. ...
Monday, 20 January 14
SUB-BIT INDONESIA COAL SWAP SEEN LOWER IN 2ND HALF OF 2014
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.78 pmt month on month on Friday 17 January 2014. T ...
Monday, 20 January 14
THE CFR SOUTH CHINA COAL MARKET APPEARS TO HAVE LOST DIRECTION
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 4.25 percept month on month and closed at US$ 79.48 per mt as ...
Sunday, 19 January 14
FREIGHT MARKETS SEE CONTINUED WEAK PERFORMANCE
COALspot.com: The market has continued to soften particularly in the far East/SE Asia sector.
The BDI was down 6 pct week on week, the index was ...
Friday, 17 January 14
US COAL PRODUCTION DOWN WEEK ON WEEK: EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.3 million short tons (mmst) of co ...
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- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
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- Global Business Power Corporation, Philippines
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- GAC Shipping (India) Pvt Ltd
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- Energy Development Corp, Philippines
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- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
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- European Bulk Services B.V. - Netherlands
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- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
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- Anglo American - United Kingdom
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- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
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- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
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- Goldman Sachs - Singapore
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- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
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- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
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- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
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- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
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- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
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- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
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- Indian Energy Exchange, India
- ASAPP Information Group - India
- PTC India Limited - India
- Heidelberg Cement - Germany
- Planning Commission, India
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
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- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
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- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
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- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
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- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
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- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
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- Minerals Council of Australia
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
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