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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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Thursday, 05 December 13
PANAMAX : THE FIRM TENDENCY CONTINUES - FEARNRESEARCH
Handy
It has been an active week for the Supramax and Handysize segment. USG is almost boiling and charterers looking to cover their December stems ...
Wednesday, 04 December 13
INDONESIAN COAL EXPORTS VOLUME AND REVENUE IN OCTOBER MARCHED TOWARDS NORTH
COALspot.com: Indonesia, the world's 4th largest coal producer and the largest multi grade coal exporter shipped over $1.76* billion worth of ...
Wednesday, 04 December 13
WEST AUSTRALIA IRON ORE FIXTURES ALSO CONTINUING TO PROVIDE A STEADY FLOW OF BUSINESS FOR CAPES - INTERMODAL
The Dry Bulk market has reversed course this past week, bringing back some of the lost excitement of the past month, as all size segments climbed hi ...
Wednesday, 04 December 13
THE BUYERS' DEMAND IS CONTINUOUSLY BULLISH - KONSTANTINOS KONTOMICHIS
The very low rates that prevailed for the bigger part of 2013 seem to have prepared the ground for buying opportunities for shipping investors. The ...
Wednesday, 04 December 13
SGX AND CFA TO COLLABORATE TO DEVELOP DERIVATIVES MARKETS IN CHINA AND SINGAPORE
Singapore Exchange (SGX) and the China Futures Association (CFA) are cooperating in the development of derivatives markets in China and Singapore.
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- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Planning Commission, India
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- The University of Queensland
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
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