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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, 09 January 14
CAPESIZE: WEST AUSTRALIA FREIGHT IS NOW DOWN IN THE $8S AND STILL DROPPING - FEARNLEYS
Handy
In the Atlantic we see rates sliding slowly for the start of 2014. Several players cvrd over the holidays and the rate decline was som ...
Thursday, 09 January 14
THE SHIPPING MARKET IN 2013 AND LOOKING FORWARD GLOBAL ECONOMY: STEADY AS SHE GOES UPWARDS - BIMCO
Over the past year, developed economies have gained traction while developing and emerging economies have suffered from slower growth. Despite key e ...
Wednesday, 08 January 14
DRY BULK MARKET PROSPECTS LOOKING BRIGHTER DESPITE SLOW START TO THE NEW YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market's benchmark, the BDI has been on a fall since the start of 2014, ending yesterday's session down to 1,87 ...
Wednesday, 08 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS FALL
COALspot.com: In the week ended January 6, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.27 m ...
Wednesday, 08 January 14
THE DRY BULK MARKET HAS LOST SOME OF ITS STEAM THESE PAST COUPLE OF DAYS: INTERMODAL
Chartering (Wet: Softer- / Dry: Softer- )
The Dry Bulk market has lost some of its steam these past couple of days although hires, espe ...
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- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Minerals Council of Australia
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
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