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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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Sunday, 10 November 13
PANAMAX COAL FREIGHT RATES REMAIN UNDER PRESSURE; SUPRAMAX BIGGEST GAINER - REDDY
COALspot.com: The freight market was up this week with all indices increased except for Panamax index.
The BDI was up by 56 points closing at 158 ...
Friday, 08 November 13
DRY BULK MARKET BOUNCES BACK ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market staged a mild comeback this week, as the industry's benchmark, the Baltic Dry Index (BDI) inched forward step by step and bit b ...
Friday, 08 November 13
US'S OCTOBER COAL PRODUCTION INCREASED BY 1.78% M-M - EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.3 million short tons (mmst) of coal in ...
Thursday, 07 November 13
FORMOSA PLASTICS SEEKS 80K MT OF 5850 GAR COAL
COALspot.com: Taiwan's Formosa Plastics Group is inviting bids for 80,000 mt of bituminous coal for delivery in Nov - Dec'13 for its Chi ...
Thursday, 07 November 13
INDONESIAN COAL EXPORT VOLUME INCREASED; REVENUE DECREASED
COALspot.com: Indonesia, the 15th largest economy, 4th largest coal producer in the world and world's largest multi grade coal exporter shipp ...
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- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- The University of Queensland
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- White Energy Company Limited
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Australian Coal Association
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
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