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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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Saturday, 27 July 13
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES ARE EXPECTED TO REMAIN STEADY - CAPT.REDDY
COALspot.com : The freight market seemed to soften this week with BDI , Cape and Panamax indices dropped average 5 percent on week.
The BDI was d ...
Thursday, 25 July 13
CAPESIZE : PACIFIC AND ATLANTIC RATES ARE HOLDING STEADY - FEARNLEYS AS
Handy
The Far East market remains quiet even if some Indo coal trip orders were fed in the market at early this week. Prompt ships passing Singapor ...
Thursday, 25 July 13
SUMMER LULL CHIPPING AWAY RECENT GAINS IN DRY BULK FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In what seems to be establishing as a permanent trend, at least for the time being, the dry bulk market kept on retreating yesterday, even if this r ...
Tuesday, 23 July 13
NEWCASTLE'S COAL EXPORTS CLIMB 17.82% ON WEEK, PORT'S DATA SHOWS
COALspot.com: Newcastle port in Australia has loaded 3,369,865 tons of coal for the week ended 0700 hours 22 July 2013, Newcastle Port Corp. s ...
Monday, 22 July 13
DRY BULK MARKET DIFFICULT TO MAINTAIN POSITIVE DRIVE CLAIMS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has seen a significant recovery in recent weeks, leading most ship classes to earnings above their operating expenses, thus brin ...
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- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Deloitte Consulting - India
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Planning Commission, India
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- White Energy Company Limited
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- GMR Energy Limited - India
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