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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, 17 October 13
CHINA'S COAL IMPORTS DOWN 9.4% TO 25.96 MMT IN AUGUST
COALspot.com: China's August Imported coal volumes down 9.4% m-m but up 27% y-y, BNP said in its latest China Coal & Power report released on 1 ...
Wednesday, 16 October 13
NEW STRATEGIES AND OPPORTUNITIES IN A RAPIDLY EVOLVING COAL INDUSTRY
The 12th Annual Coal Markets assumes even more significance as the industry seeks more market information, inputs on trade strategies, supply and de ...
Wednesday, 16 October 13
CAPES: RATES DROPPED; PANAMAX: ADVANCED - INTERMODAL
After a month and a half of straight weekly positive closings, the BDI has finished the week in the red. Monday started slow as holidays in the East ...
Wednesday, 16 October 13
WILL THIS LATEST DRY BULK MARKET UPTREND PROVE TO BE AS LONG-LIVED OR JUST ANOTHER MOMENTARY SPIKE? - CHRISTOS MANZTIOS
COALspot.com: So here we are again facing the same old question: Will this latest market uptrend prove to be as long-lived as all owners hope or jus ...
Wednesday, 16 October 13
KOSEP TO IMPORT 0.49 MILLION TONS OF 4600 NAR COAL FOR JAN - FEB '14
COALspot.com - Korea South-East Power Co., a Korean generator and distributor of electricity on behalf of five Korean Gencos intends to procure 490, ...
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- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- The University of Queensland
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- ICICI Bank Limited - India
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- White Energy Company Limited
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
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