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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, 05 April 13
SGX API 8 CFR SOUTH CHINA COAL SWAPS TO GO LIVE
COALspot.com - The Exchange has announced that the SGX API 8 CFR South China Coal Swap will go live for clearing on SGX-DC starting from 29 Ap ...
Thursday, 04 April 13
HANDY:QUIET ; PANAMAX: SLOW START; CAPESIZE: LOW ACTIVITIES - FEARNRESEARCH
Handy
The Atlantic markets remain quiet as charterers and owners waiting to see how it moves. The USG-Feast was at USD 20k and Black Sea-Feast was ...
Wednesday, 03 April 13
HBA HAS LOST US$ 1.53 PER MT IN APRIL 2013
COALspot.com - The Indonesian government’s declared coal bench mark price has lost $1.53 / MT in April 2013.
The monthly coal referen ...
Tuesday, 02 April 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 633K MT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 3,029,482 tons of thermal and coking coal for week ended 0700 hours 1 April 2013, Newcas ...
Tuesday, 02 April 13
THE GOVERNORS TO TAKE OVER AUTHORITY OF MINING, FORESTRY AND PLANTATION CONCESSIONS
The Indonesian government is planning to transfer the authority of issuing mining, forestry and plantation concessions from municipalities and distr ...
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- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
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