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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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Tuesday, 27 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMPED 15.59 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 15.59 per cent week on week to 2.76 million mt for ...
Monday, 26 August 13
CARRIAGE OF COAL CARGOES FROM KALIMANTAN, INDONESIA - WEST OF ENGLAND P&I CLUB
The Club has recently been advised by consulting scientists and engineers Dr J H Burgoyne and Partners (International) Limited that the number of in ...
Sunday, 25 August 13
API 8 CFR SOUTH CHINA COAL: HEADING TO NORTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 2.39 up month on month. The swap was moved positive ...
Sunday, 25 August 13
THE FREIGHT MARKET S7 & S8 SECTOR IS EXPECTED TO BE STEADY/FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market continued to be firm with all indices moved positive except for Panamax which was slightly down (2 pct down).
T ...
Friday, 23 August 13
US PRODUCED MORE COAL WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
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- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
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- Sojitz Corporation - Japan
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- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
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- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Economic Council, Georgia
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- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
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- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
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- Posco Energy - South Korea
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- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
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- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Australian Coal Association
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
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