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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, 18 October 13
WOOD MACKENZIE FORECASTS CHINA WILL OUTWEIGH THE REST OF THE WORLD FOR BASE METALS DEMAND BY 2017
China set to account for 52% of 117mt base metals market by 2017
China is on track to exceed rest of the World demand by 2017, becoming the singl ...
Friday, 18 October 13
DRY BULK MARKET ON "PAUSE" MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been on "pause" mode over the past week, after China's return from the week long holidays. The industry's benchm ...
Friday, 18 October 13
US PRODUCED 6.7% MORE COAL W-W
COALspot.com – United States the world’s second largest coal producer produced approximately 18.9 million short tons (mmst) of coal in a ...
Thursday, 17 October 13
CAPESIZE: RATES ARE AGAIN MOVING UPWARDS - FEARNRESEARCH
Handy
Activities were obviously slowed down in the Pacific basin. There were only few coal movements which fixed around USD 15-16k for ships in Sin ...
Thursday, 17 October 13
SGX TO LAUNCH "SGX THERMAL COAL FUTURES" NEXT MONDAY
COALspot.com: SGX is to launch two thermal coal futures contracts, SGX API 8 CFR China Coal Index Futures and SGX IHS McCloskey Indonesian Sub-bit F ...
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- Georgia Ports Authority, United States
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- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
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- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Parliament of New Zealand
- Economic Council, Georgia
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- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
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- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Minerals Council of Australia
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- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
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- Coal and Oil Company - UAE
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- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Posco Energy - South Korea
- Marubeni Corporation - India
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- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
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- Star Paper Mills Limited - India
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- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Planning Commission, India
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- The University of Queensland
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
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