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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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Monday, 07 October 13
SGX - CFR SOUTH CHINA COAL SWAPS END ALMOST FLAT
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
Monday, 07 October 13
Q3'14 SUB-BIT FOB INDONESIA COAL SWAP CLOSED 6.53% HIGHER THAN Q4'13
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery gained 0.53 % on day and fell 2.33 percept month on month ...
Sunday, 06 October 13
DRY BULK FREIGHT MARKET STAYS STEADY IN SPITE CHINESE HOLIDAYS - SOLYM CARRIERS SINGAPORE
COALspot.com: The freight market continued to remain firm in spite of Chinese holidays.
The BDI closed at 2,084 points on Friday 4 October or up ...
Saturday, 05 October 13
CAPESIZE EARNINGS SKYROCKET AS A RESULT OF INCREASED CHINA DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
An increased iron ore demand has triggered this latest dry bulk rally, which could get yet another boost during next week, when China is expected to ...
Friday, 04 October 13
NICKEL ORE SHIPMENTS - LESSONS LEARNED FROM LOSSES
One of the most pressing problems for the bulk shipping industry is the safe carriage of nickel ore. The increasing demand for this commodity is fue ...
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- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
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- Bulk Trading Sa - Switzerland
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- Indian Oil Corporation Limited
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- Interocean Group of Companies - India
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- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
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- Port Waratah Coal Services - Australia
- Australian Coal Association
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- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
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- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
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- Planning Commission, India
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- Eastern Energy - Thailand
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- Indonesian Coal Mining Association
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- Goldman Sachs - Singapore
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- Bangladesh Power Developement Board
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- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- The Treasury - Australian Government
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- Electricity Generating Authority of Thailand
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- Directorate Of Revenue Intelligence - India
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- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
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- Singapore Mercantile Exchange
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
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- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
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- Semirara Mining and Power Corporation, Philippines
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- San Jose City I Power Corp, Philippines
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
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- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
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- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
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- Tata Chemicals Ltd - India
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- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
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