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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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Friday, 28 June 13
U.S. PRODUCED 1.52 PERCENT LESS COAL WEEK ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.40 million short tons (mmst) of ...
Thursday, 27 June 13
US COAL EXPORTS BEATS CHINESE COAL IMPORTS AS THE MOST INFLUENTIAL COAL TRADE - BIMCO
The influence of American coal exports on seaborne transportation has grown significantly over the past decade. In 2002, the US exported 20.1 millio ...
Thursday, 27 June 13
HANDY : USD 12000 FOR SPOT COAL INDO/CHINA AND AROUND USD 13000 INDO/ECI - FEARNLEYS
Handy
Atlantic rates hold well. Continent to Far East is worth more than USD 14k daily whilst USG to Far East pay 23/24k a day. On the route from B ...
Thursday, 27 June 13
DRY BULK CARRIERS DOMINATE NEWBUILDING ORDERS AS SHIP OWNERS ARE ENCOURAGED BY LATEST FREIGHT RATE RALLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding orders for dry bulk carriers were already high, compared to last year, prior to the latest rally of the Baltic Dry Index (BDI), which ha ...
Tuesday, 25 June 13
CAPESIZE MARKET TO REMAIN BULLISH SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been experiencing its long-awaited rally, with the Baltic Dry Index, the industry's benchmark rising to healthier levels fo ...
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- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- SMG Consultants - Indonesia
- The University of Queensland
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- White Energy Company Limited
- PTC India Limited - India
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
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