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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, 07 May 13
NEWCASTLE PORT'S COAL EXPORTS HOLD STEADY WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,975,160 tons of thermal and coking coal for week ended 0700 hours 6 May 2013, Newcastl ...
Monday, 06 May 13
INDONESIAN COAL PRICE REFERENCE FALLS CONTINUE
COALspot.com - The Indonesian government’s declared coal bench mark price has lost $ 3.23 / MT in May 2013.
The monthly coal pr ...
Sunday, 05 May 13
SUB-BIT FOB INDONESIA COAL - MIXED TREND; API 8 CFR SOUTH CHINA COAL - POSITIVE TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average June 2013 delivery has gained 0.28 percent and API 8 CFR South China Coal shipment&nb ...
Saturday, 04 May 13
INDONESIA TO INDIA PANAMAX FREIGHT : FLAT TO SOFT - CAPT. REDDY
COALspot.com - The demand for iron ore picked up and its pushed up the cape size index by 7.86 pct. Cape index closed at 1,344 points. The BDI ...
Friday, 03 May 13
US PRODUCED 17.9 MILLION SHORT TONS (MMST) OF COAL IN A WEEK
COALspot.com - U.S. produced totaled approximately 17.9 million short tons (mmst) in a week (For the week ended April 27, 2013), EIA said in its lat ...
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- Mercuria Energy - Indonesia
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
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- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
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- Romanian Commodities Exchange
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- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
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- Bhushan Steel Limited - India
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- Bukit Asam (Persero) Tbk - Indonesia
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- The State Trading Corporation of India Ltd
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- Dalmia Cement Bharat India
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- Ministry of Transport, Egypt
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- Chettinad Cement Corporation Ltd - India
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- The Treasury - Australian Government
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- Asmin Koalindo Tuhup - Indonesia
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- Chamber of Mines of South Africa
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- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
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- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
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- Sree Jayajothi Cements Limited - India
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- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Antam Resourcindo - Indonesia
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- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
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- Goldman Sachs - Singapore
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- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
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- Australian Commodity Traders Exchange
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- Indonesian Coal Mining Association
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- GMR Energy Limited - India
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- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
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- Parliament of New Zealand
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- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
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- MS Steel International - UAE
- VISA Power Limited - India
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- Economic Council, Georgia
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
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- Central Electricity Authority - India
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- Tata Chemicals Ltd - India
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- Sakthi Sugars Limited - India
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- Global Green Power PLC Corporation, Philippines
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- Power Finance Corporation Ltd., India
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- Alfred C Toepfer International GmbH - Germany
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- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
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