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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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Friday, 13 December 13
HARD COAL : VOLUMES POSSIBLY AT RECORD-BREAKING HIGH; PRICES POSSIBLY AT A RECORD-BREAKING LOW - VDKI
Press Release : World Hard Coal Market 2013: volumes possibly at record-breaking high, prices possibly at a record-breaking low. German and UK impor ...
Friday, 13 December 13
DRY BULK SHIPPING TO WITNESS HEALTHY DEMAND MOVING FORWARD - ICS
The Institute of Chartered Shipbrokers Greek Branch organised its 9th Annual Forum at Eugenides Foundation, on Wednesday, 11th of December, with a r ...
Friday, 13 December 13
US PRODUCED APPROXIMATELY 18.4 MILLION SHORT TONS OF COAL W/E 7 DECEMBER 2013
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.4 million short tons (mmst) of coal in ...
Thursday, 12 December 13
GREAT EXPECTATIONS SANCTIONED - EVA TZIMA
News that sanctions on Iranian oil exports could be lifted sometime in the following months have shaken the markets recently. One of the world&rsquo ...
Thursday, 12 December 13
DRY BULK MARKET RATES FOR CAPESIZES TO REMAIN VOLATILE SAYS BIMCO
The dry bulk market has reached multi year highs this week, as the BDI is standing at the 2,300-point mark. In its analysis of the market, BIMCO pre ...
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- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Australian Coal Association
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
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