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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, 03 May 13
SHIP OWNERS ARE INVESTING HEAVILY IN DRY BULK CARRIER NEWBUILDINGS ONCE MORE: IS THERE ANY RATIONALE? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market remains heavily oversupplied and just as the orderbook of newbuildings had began to shrink, it seems that sh ...
Wednesday, 01 May 13
NEWCASTLE PORT SHIPPED 23.14 PER CENT MORE COAL WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,997,729 tons of thermal and coking coal for week ended 0700 hours 29 April 2013, Newca ...
Tuesday, 30 April 13
KATINGAN RIA THERMAL COAL TO START PRODUCTION FROM EARLY 2014
COALspot.com - Realm Resources Ltd. (ASX: RRP) has announced the completion of the Feasibility Study for its 51% owned Katingan Ria thermal co ...
Monday, 29 April 13
FIRST TRADES OF SGX API 8 CFR SOUTH CHINA COAL SWAP
COALspot.com - The SGX API 8 CFR South China Coal Swap went live for clearing on SGX-DC today with a total volume of 25,000 metric tonnes (25 lots). ...
Sunday, 28 April 13
SUB BIT INDONESIA COAL & CFR SOUTH CHINA COAL SWAPS STAY POSITIVE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average May 2013 delivery has gained 0.34 percent and CFR South China coal shipment gai ...
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- Vedanta Resources Plc - India
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Minerals Council of Australia
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Australian Coal Association
- Malabar Cements Ltd - India
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- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- PTC India Limited - India
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Planning Commission, India
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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