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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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Wednesday, 15 January 14
CFR SOUTH CHINA COAL SWAPS FALL BY 6.57% MONTH ON MONTH
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 6.57 percept month on month and closed at US$ 78.90 per mt as ...
Wednesday, 15 January 14
INDONESIAN MINING LAW AVERTS BOP PRESSURE, RISKS REMAIN, FITCH SAYS
The last-minute intervention at the weekend by Indonesia's politicians to avert a significant disruption of mining activity and exports, should lim ...
Wednesday, 15 January 14
Q3 AND Q4 INDONESIAN COAL SWAPS DECLINE MONTH ON MONTH
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 1.23 pmt month on month on Friday 10 January 2014. T ...
Wednesday, 15 January 14
PANAMAX: PACIFIC - REMAINED QUIET; ATLANTIC - CONTINUED THEIR RETREAT
COALspot.com: The holiday hangover seems well underway for the Dry Bulk market that saw more ground being lost this past week. The BDI has closed of ...
Tuesday, 14 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS FALL 18.28 %
COALspot.com: In the week ended January 13, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2.67 ...
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- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Planning Commission, India
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- ASAPP Information Group - India
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Minerals Council of Australia
- CNBM International Corporation - China
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
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