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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, 11 April 13
TNEB HAS OPENED 4.2 MILLION TONS IMPORTED COAL TENDER
COALspot.com - TANGEDCO, the state run utility TANGEDCO (formerly known as TNEB), Tamil Nadu state owned electricity company has opened bids to purc ...
Wednesday, 10 April 13
US COAL CONSUMPTION TO INCREASE FROM 889 MMST IN 2012 TO 948 MMST IN 2013 AND 957 MMST IN 2014 - EIA
Based on estimates for the first quarter of 2013, American coal production has continued to decline.
Total production is down 9.9 million short t ...
Wednesday, 10 April 13
DRY BULK FREIGHT RATES SEEN MOSTLY STABLE IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS WORLDWIDE
In its latest report, BIMCO forecast that for the coming six weeks, Capesize time charter average rates will remain subdued around $4,500-8,500 per ...
Monday, 08 April 13
SUB-BIT INDONESIA COAL SWAPS: UPWARD TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 2.71 percent and CFR South China coal shipment&nbs ...
Sunday, 07 April 13
CHARTER RATES ARE UNDER PRESSURE DUE TO DECLINING DEMAND - VISTAAR
COALspot.com - The freight market continued to fall further with all the indices down.
The BDI was down by 5.38 pct closing at 861 points and the ...
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- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- White Energy Company Limited
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Economic Council, Georgia
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- The University of Queensland
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
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