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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, 14 June 13
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 18.20 MILLION SHORT TONS W/E 8 JUNE 2013
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 18.20 million short tons (mmst) of ...
Thursday, 13 June 13
HANDY: SHORT PERIOD WERE FIXED AT AROUND USD 9000 LEVEL
Handy
Despite falling rates for bigger sizes, the Supras in Atlantic are seeing some improvements with fresh biz. US Gulf positions fetching tick a ...
Thursday, 13 June 13
BIMCO EXPECTS SUBDUED CAPESIZE EARNINGS FOR THE COMING WEEKS - HELLENIC SHIPPING NEWS
Bulk is not only about China even though it is a key driver. In this section, we have taken a closer look at the European seaborne coal markets, whi ...
Thursday, 13 June 13
RIO TINTO AGREES SALE OF EAGLE PROJECT FOR AN ESTIMATED US$325 MILLION IN CASH
COALspot.com - Rio Tinto has reached a binding agreement to sell its Eagle project to Lundin Mining Corporation for an estimated US$325 million in c ...
Thursday, 13 June 13
HARD COAL IMPORTS RISE SHARPLY IN GERMANY IN Q1 2013 - COAL IMPORTERS ASSOCIATION
Coal-fired Power Plants in Germany: Pillars of the Grid and the Energy Turnaround; Hard Coal Consumption and Hard Coal Imports Rise Sharply in Germa ...
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- Minerals Council of Australia
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Australian Coal Association
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