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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, 25 October 13
U.S. YEAR-TO-DATE COAL PRODUCTION REACHED TOTALLED 803.1 MMST
COALspot.com – United States the world’s second largest coal producer produced approximately 19.10 million short tons (mmst) of coal in ...
Thursday, 24 October 13
PANAMAX: RATES SLIP ACROSS BOTH HEMISPHERES
Handy
We were back from holidays but still not much enquiries in the market. Overall future direction is uncertain. Currently, ships passing Singap ...
Thursday, 24 October 13
SHIP PRICES ARE INCREASING ON THE BACK OF IMPROVED MARKET SENTIMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on retreating from its recent highs, ending yesterday at 1,786 points, down 61 points on the day, with Capesizes leadin ...
Wednesday, 23 October 13
DRY BULK MARKET HAS SHOWN SIGNS OF STABILITY - INTERMODAL
Chartering (Wet: Stable+ / Dry: Stable-)
The Dry Bulk market has shown signs of stability this past week, with the sole exception of Capes, rates f ...
Wednesday, 23 October 13
MARKET SENTIMENT IN THE DRY BULK SECTOR REMAINS POSITIVE - YANNIS OLZIERSKY
Market sentiment in the dry bulk sector remains positive despite the latest correction in freight rates for the Capesize sector, which are sliding f ...
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- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- PTC India Limited - India
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- CNBM International Corporation - China
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
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