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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, 04 December 13
SGX'S MONTHLY VOLUMES REACHED A RECORD HIGH OF 705,000 MT IN NOVEMBER 2013
COALspot.com: SGX has announced that, it monthly volumes have reached a record high of 705 lots (705,000 mt) in November 2013 with month-end open in ...
Tuesday, 03 December 13
PORT OF NEWCASTLE IN QUEENSLAND SHIPPED 1.22 MMT MORE COAL W-W
COALspot.com: In the week ended December 2, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.49 ...
Tuesday, 03 December 13
U.S PRODUCED 900.80 MMST YEAR-TO-DATE
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.7 million short tons (mmst) of coal in ...
Monday, 02 December 13
SUB-BIT INDONESIA COAL SWAP DIFFERENCE BETWEEN Q1 AND Q3 DELIVERIES ARE VERY MARGINAL
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 1.67 pmt month on month on Friday 29 Novemb ...
Sunday, 01 December 13
API 8 CFR SOUTH CHINA COAL SWAP FOR Q2 AND Q3 DELIVERY SHOWS A DECLINE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 0.63 percept d-d on Friday 29 November 2013. The CFR South ...
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- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- The University of Queensland
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
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