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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, 30 December 13
INDONESIAN COAL TO BE PART OF INDEX DETERMINING POWER TARIFFS - BUSINESS STANDARD
In a significant move, power sector regulator CERC has decided to provide 50 per cent weightage for Indonesian coal in the benchmark index that is u ...
Friday, 27 December 13
THE EXPORT OF UNPROCESSED MINERALS WOULD NOT BE ALLOWED AFTER 12 JAN 2014 - INDONESIAN ENERGY MINISTER
COALspot.com: The government of Indonesia will implement Law No. 4 of 2009 on Mineral and Coal in full and consistently by January 12, 2014, said, m ...
Friday, 27 December 13
INDONESIA SHIPPED 15.75 PERCENT MORE COAL IN NOVEMBER
COALspot.com: Indonesia, the world's 4th largest coal producer and the largest multi grade coal exporter shipped over $2* billion worth of co ...
Thursday, 26 December 13
COAL & OIL GROUP SECURES US$ 250 MILLION FUNDING FOR ITS 1200MW THERMAL POWER PLANT IN INDIA
COALspot.com: Dubai-based Coal & Oil (C&O) Group has announced that it has secured additional funding of approximately Dhs. 1 billion (appro ...
Wednesday, 25 December 13
DRY BULK INDEX LOST SOME GROUND THIS PAST WEEK - INTERMODAL
Chartering (Wet: Firm+ / Dry: Softer - )
The Dry Bulk Index lost some ground this past week, on the back of activity slowing down befor ...
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- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- White Energy Company Limited
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- The University of Queensland
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
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