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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, 20 November 13
PANAMAX MARKET RESUMED ITS NEGATIVE MOVEMENT FOR A SECOND WEEK IN A ROW - INTERMODAL
COALspot.com: The recovery noted the week prior in the dry Bulk market proved to be short-lived, as the BDI slipped back down to the low 1,500 point ...
Wednesday, 20 November 13
TAIPOWER TO IMPORT 0.825 MMT OF 5000 GAR COAL FOR Q2' 14
COALspot.com: Taiwan Power Company intends to procure 825,000 metric tons of general sub-bituminous coal with calorific value not lesser than 5,000 ...
Wednesday, 20 November 13
CAPES AND PANAMAXES SOFTENING; SMALLER SIZE SEGMENTS FIRMING FURTHER - INTERMODAL
Chartering (Wet: Firm+ / Dry: Stable- )
The BDI has closed off the week on the red, with rates for Capes and Panamaxes softening and those fo ...
Tuesday, 19 November 13
INDONESIAN GOVERNMENT'S DECLARED COAL PRICE REFERENCE UP 1.98% IN NOVEMBER
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 1.52 / MT ...
Tuesday, 19 November 13
WEEKLY COAL EXPORTS FROM NEWCASTLE PORT INCREASED BY 20.59%
COALspot.com: In the week ended November 18, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totaled 2.92& ...
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- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Indian Energy Exchange, India
- Economic Council, Georgia
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
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