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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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Saturday, 07 December 13
A RARE TIME IN RECENT SHIPPING MARKET HISTORY: BOTH DRY BULK AND VLCC TANKER EARNINGS ARE ON THE RISE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Around this time of year, back in 2008, i.e. five years ago, the shipping markets were plagued with the aftermath of the global financial crisis tha ...
Friday, 06 December 13
INDONESIAN PARLIAMENT REJECTED A GOVERNMENT PROPOSAL TO EASE THE BAN ON EXPORTING UNPROCESSED ORE
COALspot.com: Indonesian House of Representatives rejected a proposal from Energy and Mineral Resources Minister Jero Wacik on to ease the ban on ex ...
Friday, 06 December 13
THE MINISTRY OF ENERGY & MINERAL RESOURCES OF INDONESIA FIXED DEC'13 HBA AT US$ 80.31
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 2.18 / MT ...
Friday, 06 December 13
US PRODUCED APPROXIMATELY 82.8 MILLION SHORT TONS OF COAL IN NOVEMBER 2013
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.00 million short tons (mmst) of coal in ...
Friday, 06 December 13
PANAMAXES HAVE BEEN THE ' WEAPON OF CHOICE' BY MOST DRY BULK SHIP OWNERS DURING 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Low ship prices, the direct consequence of subdued freight rates for the larger part of 2013 have been the main driving force behind this year's ag ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- The University of Queensland
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
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