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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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Wednesday, 12 June 13
INDONESIAN COAL PRICE REFERENCE SLIDES TO 2013 LOW
COALspot.com - Indonesian Coal Price Reference continues to take its lumps this month, dropping about 0.54 % and hitting a 2013 low. The Indonesian ...
Tuesday, 11 June 13
COAL: NO SIGN OF RECOVERY - GABRIELLA
COALspot.com: We attended the 19th Annual Coaltrans Asia Conference, where we found most of the speakers were not very optimistic on the outlook for ...
Tuesday, 11 June 13
NEWCASTLE PORT SHIPPED MORE COAL WEEK ENDED 11 JUNE 2013
COALspot.com - Newcastle port in Australia has loaded 3,104,509 tons of coal for the week ended 0700 hours 11 June 2013, Newcastle Port Corp. ...
Tuesday, 11 June 13
OUTLOOK FOR CAPESIZES LOOKS GRIM, DESPITE FALLING IRON ORE PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Things aren't looking all that rosy for the dry bulk market, despite a stronger volume of iron ore imports during the months of March and April, as ...
Sunday, 09 June 13
CFR SOUTH CHINA COAL SWAP IS UNDER PRESSURE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have lost 0.03 percent week on week but gained 0.07 pe ...
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- GAC Shipping (India) Pvt Ltd
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- Parry Sugars Refinery, India
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- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- White Energy Company Limited
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- Merrill Lynch Commodities Europe
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- Chamber of Mines of South Africa
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- Economic Council, Georgia
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- Chettinad Cement Corporation Ltd - India
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- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
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- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Australian Coal Association
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
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- Globalindo Alam Lestari - Indonesia
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- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
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- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
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- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
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- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
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- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
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- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
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- Jindal Steel & Power Ltd - India
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- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
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