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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, 24 May 13
US'S COAL PRODUCTION INCREASED WEEK ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 18.90 million short tons (mmst) of ...
Friday, 24 May 13
OPG POWER VENTURES OF INDIA LOOKING FOR 210,000 MT OF 4,200 GAR INDONESIAN THERMAL COAL
COALspot.com - OPG Power Ventures Plc (OPG) is an AIM listed (London Stock Exchange) and fast growing developer and operator of power plants in Indi ...
Thursday, 23 May 13
HANDY : THE ATLANTIC MARKET REMAINS UNCHANGED - FEARNRESEARCH
Handy
The Atlantic market remains unchanged. USG-Feast rates were around USD 19k. Little change from last week in the Pacific, fewer stems and tonn ...
Thursday, 23 May 13
COLOMBIA SHIPPED 11.74 MILLION TONS OF THERMAL COAL IN Q1
COALspot.om - Colombia produced about 18,388,972.94 mt of coal for the first quarter of 2013.
Q1' 2013 coal production was around 21.42 p ...
Wednesday, 22 May 13
COKAL SIGNS JV WITH MDM, FOR BARITO RIVER BARGING
COALspot.com - Cokal Limited (ASX: CKA) has announced that it has entered into a 50:50 Joint Venture (JV) with Meratus Advance Maritime (MDM) one of ...
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- Central Java Power - Indonesia
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- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
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- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
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- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
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- Global Business Power Corporation, Philippines
- Minerals Council of Australia
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- Energy Link Ltd, New Zealand
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- The State Trading Corporation of India Ltd
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- Ministry of Transport, Egypt
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- Sojitz Corporation - Japan
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- Parliament of New Zealand
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- Meralco Power Generation, Philippines
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- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
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- Karbindo Abesyapradhi - Indoneisa
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- Petron Corporation, Philippines
- The Treasury - Australian Government
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- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
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- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- SMC Global Power, Philippines
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- White Energy Company Limited
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- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
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- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
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- Georgia Ports Authority, United States
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- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
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- Ministry of Finance - Indonesia
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- Kaltim Prima Coal - Indonesia
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- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
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- CNBM International Corporation - China
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- Eastern Coal Council - USA
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- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
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- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- VISA Power Limited - India
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- Savvy Resources Ltd - HongKong
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- Renaissance Capital - South Africa
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