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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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Sunday, 22 December 13
QUIET FREIGHT MARKET DUE TO LONG HOLIDAYS
COALspot.com: The market was soft this week with all indices down. However towards second half of the week the futures on segments was firming up.
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Friday, 20 December 13
US PRODUCED 2.71% MORE COAL WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal in ...
Friday, 20 December 13
DRY BULK MARKET SLUMPS AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As has been the case in recent years, the dry bulk market has been on a downward trend ahead of the Holiday Season for a large part of the world. Th ...
Thursday, 19 December 13
SHIPPING CONFIDENCE HITS THREE-YEAR HIGH - MOORE STEPHENS
Overall confidence levels in the shipping industry rose to their highest level for more than three years over the three-month period to November 201 ...
Wednesday, 18 December 13
SNP ACTIVITY IN CHINA SEEMS TO BE SLOWING DOWN - CHRISTOS TRAGEAS
Approaching the end of the year, SnP activity in China seems to be slowing down in comparison to the first half of this quarter, as most Chinese Shi ...
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- New Zealand Coal & Carbon
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- Indian Energy Exchange, India
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- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
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- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
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- Central Electricity Authority - India
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- Mercator Lines Limited - India
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- Tamil Nadu electricity Board
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- Bukit Makmur.PT - Indonesia
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- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
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- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
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- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Planning Commission, India
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- Edison Trading Spa - Italy
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- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
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- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
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- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
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- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
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- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
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- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
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- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
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- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
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- Lanco Infratech Ltd - India
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- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
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