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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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Thursday, 01 August 13
CAPESIZE: THE FLOW OF CARGOES REMAINS RELATIVELY STABLE, AND THE PACIFIC IS LOOKING PROMISING - FEARNLEYS AS
Handy
The Pacific market is still facing low activity, so no wonder that the tonnage list is getting longer. It´s still Ramadan and only a fe ...
Wednesday, 31 July 13
COAL GASIFICATION
IBC’s Coal Gasification conference explores the opportunities for coal gasification investment and development in Asia.
With depleting dome ...
Wednesday, 31 July 13
SUPRAMAX : THE PACIFIC BASIN WAS MOVING ON A POSITIVE PATH - EVA TZIMA
COALspot.com: Cape - Despite holding their ground fairly well early on in the week, Capes in the Atlantic basin gave in to the mounting pressure fro ...
Tuesday, 30 July 13
HARD COAL ON THE WAY TO BECOMING THE WORLD'S MOST IMPORTANT ENERGY SOURCE - VDKI
Press Release : Hard coal continued to be the world’s fastest-growing fossil primary energy source in 2012. It covered about 28% of the world ...
Tuesday, 30 July 13
WIJAYA TRI UTAMA PURCHASES MICROCOAL TECHNOLOGIES' CLEAN COAL UPGRADING FACILITY
- First MCI commercial scale application of proprietary microwave technology to upgrade coal thermal output and reduce pollutants
- MicroCoal to re ...
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- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- PTC India Limited - India
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
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