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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, 18 August 13
SUB-BIT FOB INDONESIA COAL SWAP : ON POSITIVE DIRECTION ON DAY, WEEK AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 1.83 up month on month. The swap was moved positive ...
Sunday, 18 August 13
INDO - INDIA FREIGHT EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market was up this week with the BDI gaining more than 10 pct due to strong Cape Sector.
The BDI was closed at 1,102 p ...
Friday, 16 August 13
US COAL PRODUCTION SLIGHTLY UP ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.10 million short tons (mmst) of ...
Thursday, 15 August 13
CAPESIZE : TRENDS SOMETIMES SHIFT WITH NO PRIOR WARNING - FEARNRESEARCH
Handy
The influence of the summer holidays across Europe was felt in the Atlantic basin this week. Very little activity and a growing list of avail ...
Wednesday, 14 August 13
ANOTHER WEEK IN THE RED FOR DRY BULK CARRIERS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable- )
Another week in the red for Dry Bulk carriers with the market losing further steam as fewer an ...
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- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Australian Coal Association
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- The Treasury - Australian Government
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
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