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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, 18 July 13
DRY BULK MARKETS RETAINS RECENT GAINS, MOVES SIDEWAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on moving sideways this week, as evidenced by the latest trends of the industry's benchmark, the Baltic Dry Index (BDI ...
Wednesday, 17 July 13
NEWCASTLE COAL EXPORTS FELL 3.85% ON WEEK
COALspot.com: Newcastle port in Australia has loaded 2,860,149 tons of coal for the week ended 0700 hours 15 July 2013, Newcastle Port Corp. s ...
Wednesday, 17 July 13
TORN BETWEEN A CREDIT CRUNCH AND SUSTAINABLE GROWTH - GEORGE DERMATIS
COALspot.com: In 2012 China expanded at a rate of 7.8%, its worst annual performance in 13 years, raising criticism over the newly appointed governm ...
Tuesday, 16 July 13
TAKE - OR - PAY CONTRACTS CONTINUE TO INCENTIVISE AUSTRALIAN COAL PRODUCERS DESPITE POTENTIAL NEGATIVE CASH MARGINS - WOOD MACKENZIE
Australia's coal production has continued to grow, despite lower coal prices in 2013. Global investors and suppliers are therefore questioning whet ...
Monday, 15 July 13
INDONESIAN GOVERNMENT HAS REVISED DOWN ITS JULY BENCH-MARK COAL PRICE TO US$ 81.69 PER MT
COALspot. com - Indonesian Coal Price Reference dropped 3.75 % and hitting a 2013 low. The Indonesian government has revised down its owned coal ben ...
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- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
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