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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, 30 May 13
HANDY: RBCT ROUND WAS AROUND USD 9K + 300 BB - FEARNRESEARCH
Handy
THE Atlantic market remained flat. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 12k. The Pacific market remained quiet with no ...
Wednesday, 29 May 13
SHIP OWNERS KEEP ON SPENDING ON NEWBUILDINGS AS PRICES ARE DEEMED TOO LOW TO RESIST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It's been yet another week on increased newbuilding ordering activity with Hellenic ship owners appearing rathe active, on the back of attractive f ...
Tuesday, 28 May 13
NEWCASTLE PORT SHIPPED 9.76 PERCENT MORE COAL W/E 27 MAY 2013
COALspot.com - Newcastle port in Australia has loaded 2,420,366 tons of coal for week ended 0700 hours 27 May 2013, Newcastle Port Corp. said ...
Sunday, 26 May 13
AMPLE SUPPLY, LOW DEMAND KEEP COAL PRICES UNDER PRESSURE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have lost 0.07 percent and API 8 CFR South China Coal shipment los ...
Friday, 24 May 13
ENGAGEMENT WITH POTENTIAL STRATEGIC AND OFF TAKE PARTNERS ACCELERATING - REALM RESOURCES
COALspot.com - Following the recent completion of the Feasibility Study, the Realm Resources Ltd. (ASX: RRP) has focused on securing strategic ...
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- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- PTC India Limited - India
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- The University of Queensland
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
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