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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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Sunday, 31 March 13
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Friday, 29 March 13
SUB-BIT INDONESIA COAL SWAPS: UP 0.55 % WOW; CFR SOUTH CHINA COAL CONTRACT: UP 0.23 % WOW
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Thursday, 28 March 13
SHIP OWNERS KEEN ON ACQUIRING SECOND HAND TONNAGE, AS WELL AS NEW BUILDINGS IN CONVENTIONAL SEGMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
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Wednesday, 27 March 13
PTBA HAS CONCLUDED US$ 16.14 BILLION WORTH OF COAL SALES AND PURCHASE AGREEMENT WITH PLN
COALspot.com - PT. Bukit Asam, a 32 years old Indonesian state owned coal miner has signed a coal sales and purchase agreement with PT PLN, (a state ...
Wednesday, 27 March 13
SHIPPING CONFIDENCE REACHES HIGHEST LEVEL FOR TWO YEARS - MOORE STEPHENS
Overall confidence levels in the shipping industry recovered to their highest level for two years in the three months ended February 2013, according ...
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- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Australian Coal Association
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
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