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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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Tuesday, 21 May 13
NEWCASTLE PORT COAL SHIPMENTS SEEN FALLING WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,205,024 tons of thermal and coking coal for week ended 0700 hours 20 May 2013, Newcast ...
Sunday, 19 May 13
COAL PRICES ARE SLUMPING DUE TO WEAK DEMAND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have gained 0.03 percent and API 8 CFR South China Coal shipment g ...
Sunday, 19 May 13
FREIGHT RATES TO REMAIN UNSTABLE AND VOLATILE - CAPT. REDDY
COALspot.com – The freight remained weak this week with all the segments down.
The BDI, the Baltic Dry Index is a number issued daily by th ...
Friday, 17 May 13
US COAL PRODUCTION CLIMBED 3.35 PER CENT WEEK ON WEEK
COALspot.com - U.S. produced totaled approximately 18.50 million short tons (mmst) in a week (For the week ended May 11, 2013), EIA said in its late ...
Thursday, 16 May 13
PANAMAX: THE FORWARD CURVE IS FALLING GRADUALLY - FEARNRESEARCH
Handy
The Atlantic market remained quiet. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 11k. The Pacific market remained uncertain as ...
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- Ministry of Finance - Indonesia
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- Electricity Authority, New Zealand
- Thai Mozambique Logistica
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- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
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- Semirara Mining Corp, Philippines
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- Sarangani Energy Corporation, Philippines
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- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
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- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
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- Price Waterhouse Coopers - Russia
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- Africa Commodities Group - South Africa
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- VISA Power Limited - India
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- Australian Coal Association
- Metalloyd Limited - United Kingdom
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- Billiton Holdings Pty Ltd - Australia
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- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
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- Globalindo Alam Lestari - Indonesia
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- The University of Queensland
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- Romanian Commodities Exchange
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- Indonesian Coal Mining Association
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- Ministry of Transport, Egypt
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- Kohat Cement Company Ltd. - Pakistan
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- Bayan Resources Tbk. - Indonesia
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- Parliament of New Zealand
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- Coalindo Energy - Indonesia
- The Treasury - Australian Government
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- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
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- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
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- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
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- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
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- Central Java Power - Indonesia
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
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- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
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- Rio Tinto Coal - Australia
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- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
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- Indian Energy Exchange, India
- MS Steel International - UAE
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- Petron Corporation, Philippines
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- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
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