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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, 13 November 13
Q3' 14 CFR SOUTH CHINA COAL SWAPS CLOSED HIGHER THAN Q1' 14 PRICES
COALspot.com : API 8 CFR South China Coal swaps for average Q1 14 delivery gained 0.55 percept W-W on Friday 8 November 2013. The CFR South China Co ...
Wednesday, 13 November 13
THE SOFTENING HAS AFFECTED THE BIGGER SIZE SEGMENTS; SMALLER ONES STILL APPEAR TO BE VERY STABLE - INTERMODAL
After a month and a half of back to back weekly declines, the dry bulk market has finally reversed its negative course. We believe that there should ...
Wednesday, 13 November 13
DRY BULK MARKET HAS REVERSED ITS NEGATIVE COURSE - INTERMODAL
Chartering (Wet: Firm+ / Dry: Stable+ )
The Dry Bulk market has reversed its negative course this past week with rates for Capes making up fo ...
Wednesday, 13 November 13
NEWCASTLE COAL EXPORTS PLUNGE 12.40% IN W/E 10 NOVEMBER FROM THE PRIOR WEEK
COALspot.com: In the week ended November 11, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totaled 2.42 ...
Monday, 11 November 13
TAMIL NADU STATE OWNED POWER GENERATOR TO IMPORT 3.7 MMT OF 6000 GAD COAL
COALspot.com - TANGEDCO, Tamil Nadu Generation & Distribution Corporation Ltd, Tamil Nadu state owned power generator & distributor intends ...
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- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Australian Coal Association
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
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