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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, 11 December 13
THE INDONESIAN GOVERNMENT IS CONSIDERING SETTING A REGULATION ON THE MINIMUM PURITY TO REGULATE UNPROCESSED ORE BAN
COALspot.com: Energy and Mineral Resources Minister Jero Wacik recently proposed to house those mining (mineral) companies that had shown a commitme ...
Wednesday, 11 December 13
BDI REACHED A PEAK OF YEAR RECORD OF 2,237 POINTS WHICH IS A SIGNIFICANT CHANGE IN MARKET CONDITIONS
Getting closer to the end of 2013, it is important that we have a review of the course the market has taken these past 12 months by looking at the B ...
Tuesday, 10 December 13
HNL, AN INDIAN STATE-OWNED NEWSPRINT PAPER MAKER SEEKS 50K TONS OF INDONESIAN 5600 COAL
COALspot.com: Hindustan Newsprint limited (HNL), an Indian state owned news print paper producer invited bids to supply 50,000MT of min 5,200kcal/kg ...
Tuesday, 10 December 13
COLOMBIAN THERMAL COAL EXPORTS SLIPPED 25.54% M-M IN OCTOBER'13
COALspot.com: Colombia's Thermal coal exports in October dropped 25.54% month on month to 5,990,815.13 million mt, according to data from mining de ...
Tuesday, 10 December 13
NEWCASTLE COAL EXPORTS PLUNGE W-O-W
COALspot.com: In the week ended December 9, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2.50 ...
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- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Australian Coal Association
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
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