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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, 18 December 13
DEMOLITION ACTIVITY SCALED BACK AS FREIGHT RATES RISE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's always been the case that each time we witness a spike in freight rates, demolition activity is decreasing, as owners are looking for more car ...
Tuesday, 17 December 13
NEWCASTLE COAL EXPORTS UP 37.83% WEEK ON WEEK
COALspot.com: In the week ended December 16, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.45 ...
Monday, 16 December 13
SUB-BIT FOB INDONESIA COAL SWAP LOST $ 0.53 IN A WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery gained $ 0.91 pmt month on month on Friday 13 December 2013 ...
Monday, 16 December 13
API 8 CFR SOUTH CHINA COAL Q3' 14 DELIVERY PRICE CLOSED $1.63 LESSER THAN Q1' 14 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 5.34 percept month on month as on Friday 13 December 2013. ...
Sunday, 15 December 13
SUPRAMAX'S FREIGHT RALLY COMES TO AN END THIS WEEK
COALspot.com: The BDI was up by 7 pct closing at 2,330 points week on week and the cape index was also up by 10.51 points and closed at 4,246 points ...
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- Marubeni Corporation - India
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- Simpson Spence & Young - Indonesia
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- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
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- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
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- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
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- Australian Coal Association
- PTC India Limited - India
- Petron Corporation, Philippines
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- MS Steel International - UAE
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- Global Coal Blending Company Limited - Australia
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
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- Australian Commodity Traders Exchange
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- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
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- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
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- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
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- New Zealand Coal & Carbon
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- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
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- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
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- European Bulk Services B.V. - Netherlands
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- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
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- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
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- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
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- Eastern Energy - Thailand
- Central Java Power - Indonesia
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- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
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- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
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- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
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- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
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- Wilmar Investment Holdings
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- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
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- Parliament of New Zealand
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- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
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- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- GMR Energy Limited - India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Economic Council, Georgia
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- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
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