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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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Tuesday, 19 November 13
SHIP OWNER POUR MORE MONEY INTO DRY BULK CARRIER ACQUISITIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The recent dry bulk market's rally, coupled with an expected fall in oversupply and robust cargo demand has boosted ship owners' optimism on the l ...
Monday, 18 November 13
SUB-BIT INDONESIA COAL SWAP LOST ON WEEK; MARGINALLY GAINED ON DAY
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 1.25 pmt month on month on Friday 15 Novemb ...
Sunday, 17 November 13
Q4' 14 API 8 CFR SOUTH CHINA COAL SWAP CLOSED $ 3.43 PMT (4.34 %) HIGHER THAN Q1' 14 SWAP
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 0.05 percept d-d on Friday 15 November 2013. The CFR South ...
Saturday, 16 November 13
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES FIRM DUE TO STRONG COAL ACTIVITIES
COALspot.com: The Cape and Panamax index was down this week and pulling down the BDI by about 5 pct. BDI was closed at 1507 points on Friday 1 ...
Friday, 15 November 13
DRY BULK MARKET STILL LINGERING ON, DESPITE PREDICTIONS OF NEW IMMINENT RALLY PRIOR TO THE YEAR'S END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn't yet managed to stage a new comeback after its retreat from the recent multiyear highs. Yesterday, the industry's benchm ...
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- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- The University of Queensland
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
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