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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, 01 November 13
DRY BULK MARKET IN FIRST POSITIVE SIGN IN DAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Owners of dry bulk carriers are well aware of the rollercoaster ride that has been the market for their vessels over the past few years. This trend ...
Thursday, 31 October 13
HANDY: ACTIVE; PANAMAX: QUIET; CAPESIZE: NO LIGHT
Handy
The handy market had an active week however not directly translated into the rates we´ve seen in the Pacific. We see more coal and baux ...
Wednesday, 30 October 13
INDONESIAN STATE OWNED COAL MINER HAS EXPORTED 7.02 MILLION TONS OF COAL IN 9 MONTHS
COALspot.com : PT. Bukit Asam, Indonesian state owned coal miner has sold 13.24 million tons of coal for the period January - September 2013. Accord ...
Wednesday, 30 October 13
DRY BULK MARKET HAS LOST FURTHER GROUND THIS PAST WEEK - INTERMODAL
Chartering (Wet: Firm+ / Dry: Stable-)
The Dry Bulk market has lost further ground this past week, as de-creased activity in both basins for both C ...
Wednesday, 30 October 13
CAPESIZE: DOWNWARD; SUPRAS AND HANDIES: STABLE - INTERMODAL
The Dry Bulk market has resumed its downward movement, noting another dip for a third week in a row. The larger size segments were responsible for p ...
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- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- The University of Queensland
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
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