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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, 26 March 13
NEWCASTLE PORT SHIPPED 2.39 MMT OF COAL W/E 25 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2.396 million tons of thermal and coking coal for week ended 0700 hours 25 March 2013, N ...
Monday, 25 March 13
BUNKER FUELS ARE ABOUT TO GET CLEANER, BUT AT WHAT COST? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The cost of bunkers is nowadays the driving force behind most ship owners' major decisions, with regulations bound to change in many parts of the w ...
Sunday, 24 March 13
THE SUB-BIT INDONESIA'S COAL SWAPS FOR Q2 DELIVERY PRICE LOST 7.47 PERCENT PMT M-O-M
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 3.39 percent and CFR South China coal shipment 2.65 ...
Sunday, 24 March 13
FREIGHT MARKETS CONTINUED TO FIRM - VISTAAR
COALspot.com - This freight market continued to remain firm in all segments except for cape index which softened slightly.
The BDI was up by 4.60 ...
Sunday, 24 March 13
DRY BULK MARKET PROSPECTS OFFER ROOM FOR RESTRAINED OPTIMISM SAYS SHIP OWNER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its announcement regarding its annual performance, ship owner Frontline offered some useful insight on the future prospects of both the dry bulk ...
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- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
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