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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, 13 January 14
INDONESIAN ORE BAN TO HAVE LIMITED IMPACT ON CHINESE ALUMINIUM PRODUCERS, FITCH RATINGS SAYS
COALspot.com: Fitch Ratings says today that Indonesia's ban on exports of unprocessed mineral ore will have limited impact on Chinese aluminium pro ...
Sunday, 12 January 14
THE FREIGHT MARKET CONTINUE TO REMAIN WEAK NEXT WEEK - SOLYM CARRIERS
Wish You A very Happy New Year
COALspot.com: The market has dropped quite a lot as expected due to holidays and probably also the effect of ban o ...
Friday, 10 January 14
DECISION ON ORE EXPORT BAN WILL BE MADE TOMORROW: INDUSTRY MINISTER, JG SAYS
Industry Minister M.S. Hidayat dismissed reports on Thursday that the government had made a decision on the matter. “We will only make a decis ...
Friday, 10 January 14
US COAL PRODUCTION UP 5.8% ON WEEK IN WEEK ENDED SATURDAY 4 JANUARY
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal in ...
Thursday, 09 January 14
THE INDONESIAN GOVERNMENT EASES ORE EXPORT BAN
COALspot.com: The Indonesian government has finally agreed to ease the ore-export ban just a few days before the Sunday deadline amid protests from ...
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- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
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- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
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- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Planning Commission, India
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
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- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- VISA Power Limited - India
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
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- Australian Coal Association
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
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