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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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Friday, 15 November 13
US COAL PRODUCTION UP 2.59% WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.8 million short tons (mmst) of coal in ...
Friday, 15 November 13
TAIWAN'S PLASTICS GROUP FORMOSA TO IMPORT 1.37 MILLION TONS OF COAL FOR Q1' 14
COALspot.com: Taiwan's Formosa Plastics Group is inviting bids for total 1.37 million mt of coal for 1Q’ 14 for its various plants in Taiwan, ...
Thursday, 14 November 13
KOMIPO TO BUY 270K MT OF SUB-BITUMINOUS COAL FOR Q2' 14
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International Open Bidding for 140,000 Metric Tons (MT) of sub-bituminous coal ...
Thursday, 14 November 13
PANAMAX : MARKET SHOULD BE AROUND USD 11500 FOR 1 YEAR - FEARNLEYS AS
Handy
The Atlantic market has picked up this week with prompt ships able USG for November dates coming off and chrts need to pay up in order to cov ...
Wednesday, 13 November 13
Y'14 SUB-BIT INDO COAL SWAP MOVING AT SNAIL-SPEED
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’2014 delivery gained 2.95 percept month on month on Friday ...
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- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Planning Commission, India
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
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