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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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Sunday, 08 September 13
BALTIC INDEX UP ON HIGHER CAPESIZE, PANAMAX RATES
COALspot.com : The freight market continued saw one of the biggest rally last week with Cape Size taking the lead followed by Panamax.
The BDI wa ...
Friday, 06 September 13
DRY BULK MARKET REACHES NEW YEAR-HIGHS ON THE BACK OF INCREASED CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been on the rise once again, but this time around any new increase of freight rates translates into new year-highs, thus bri ...
Friday, 06 September 13
US PRODUCED APPROXIMATELY 90.80 MMST OF COAL IN AUGUST
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.90 million short tons (mmst) of ...
Thursday, 05 September 13
INDONESIAN COAL EXPORTS UP BY 6.72 PERCENT IN JULY
COALspot.com: Indonesia, the world's largest multi grade coal exporter shipped 35.268* million tons of coal in July 2013. Indonesian coal exp ...
Thursday, 05 September 13
HANDY: NICKEL ORE WAS PUSHING THE FAR EAST MARKET - FEARNLEYS
Handy
Nickel Ore was pushing the Feast market, several ships were fixed from low teens to $14k. Indo/India was still supported by bauxite, while th ...
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- Toyota Tsusho Corporation, Japan
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- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
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- Chamber of Mines of South Africa
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- Australian Coal Association
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- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
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- Billiton Holdings Pty Ltd - Australia
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- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
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- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
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- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
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- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
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- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
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- Singapore Mercantile Exchange
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- Jorong Barutama Greston.PT - Indonesia
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- Economic Council, Georgia
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- Commonwealth Bank - Australia
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- CNBM International Corporation - China
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
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- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Minerals Council of Australia
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- GMR Energy Limited - India
- Planning Commission, India
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Parliament of New Zealand
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- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
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- SMC Global Power, Philippines
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- Indian Oil Corporation Limited
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- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
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