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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, 25 December 13
SHIPPING : AS FAR AS THIS CYCLE IS CONCERNED, 'WE HAVE SEEN THE WORST....!' - JOHN N. COTZIAS
In a week’s time the year comes to an end. Having been a speaker in two seminars over the past 5 days I was able to see the year ending trends ...
Tuesday, 24 December 13
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS UP 11.46% W-W
COALspot.com: In the week ended December 23, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.84 ...
Tuesday, 24 December 13
SGX HAS LAUNCHED FREIGHT FUTURES
COALspot.com: Singapore Exchange (SGX) has announced the launch of freight future yesterday.
According to SGX’s press release, SGX has laun ...
Monday, 23 December 13
API 8 CFR SOUTH CHINA COAL SWAP FOR AVERAGE Q1' 14 CLOSED AT $ 82.80
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 2.97 percept month on month as on Friday 20 December 2013. ...
Sunday, 22 December 13
Q1' 14 DELIVERY COAL SWAPS CLOSING HIGH COMPARED TO Q4' 14 DELIVERY CLOSING
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery gained $ 1.31 pmt month on month on Friday 20 December 2013 ...
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- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Australian Coal Association
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
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