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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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Thursday, 07 November 13
THE ENERGY INDUSTRY'S RISING WATER CHALLENGE - WOOD MACKENZIE
Water poses a variety of business risks for the energy industry, and could play an influential role in shaping the future energy supply mix, accordi ...
Thursday, 07 November 13
HANDY : INDO/CHINA ROUNDS ARE SEEING BIDS AT AROUND $16K
Handy
In the Atlantic we have seen more activity this week with several fixtures being concluded at firm rates. USG/Feast been reported at 30k and ...
Wednesday, 06 November 13
THE BIGGER SIZE SEGMENTS LOST GROUND WHILE SUPRAS AND HANDIES HELD ON TO THEIR GAINS - INTERMODAL
Chartering (Wet: Stable+ / Dry: Stable- )
A mirror image of the week prior for the Dry Bulk market, as once more the bigger size segments los ...
Wednesday, 06 November 13
WILL NEW ORDERS DRIVE THE MARKET DOWN AGAIN ONCE DELIVERIES COMMENCE
"While there are many concerns on whether the new orders will drive the market down again once deliveries commence, the second half of 2013 has ...
Tuesday, 05 November 13
AUSTRALIA'S NEWCASTLE PORT SEES DROP IN COAL EXPORTS W-W
COALspot.com: In the week ended November 4, Power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totaled 2.77 m ...
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- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- The University of Queensland
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
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