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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, 01 September 13
INDONESIA TO INDIA SPOT FREIGHT STAYS FIRM THIS WEEK - VISTAAR
COALspot.com: The freight market continued to be firm with even though the BDI and Cape index dropped by about 3 pct week on week.
The BDI was do ...
Friday, 30 August 13
US COAL PRODUCTION FELL 0.48 PERCENT WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.70 million short tons (mmst) of ...
Thursday, 29 August 13
HANDY: THE PACIFIC MARKET STARTED HEALTHY THIS WEEK - FEARNRESEARCH
Handy
The Pacific market started healthy this week. We have seen many bauxite, iron ore and few coal fixtures. Ships passing Singapore were able to ...
Thursday, 29 August 13
NO RATING IMPACT ON INDONESIAN ENERGY COMPANIES FROM RUPIAH DEPRECIATION - FITCH RATINGS
Fitch Ratings says the credit profiles of rated Indonesian energy and utilities companies, including thermal coal producers, will largely remain una ...
Wednesday, 28 August 13
THE BDI HAS MOVED TO LEVELS CONSIDERABLY STRONGER THAN THE BEGINNING OF THE YEAR - INTERMODAL
By George Bassakos
SnP Broker - Intermodal
We have already reached the end of August and whilst students are preparing themselves for another sc ...
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- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Ministry of Mines - Canada
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Minerals Council of Australia
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Singapore Mercantile Exchange
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