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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, 19 March 13
SHIP PRICES COULD BE CLOSING IN TO REACH THEIR BOTTOM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
One of the latest developments in shipping asset prices has been the reluctance from shipyards to further reduce their price expectations to higher ...
Sunday, 17 March 13
A WEAK WEEK FOR SUB-BIT INDONESIA COAL SWAPS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 2.11 percent and CFR South China coal shipment ...
Sunday, 17 March 13
COAL FREIGHT RATES STEADY ON HIGHER DEMAND - CAPT. REDDY
COALspot.com - This freight market continued to remain firm in all segments.
The BDI was up by 5.81 pct closing at 892 points. Cape index was up ...
Friday, 15 March 13
CHEAP SHIP VALUATIONS DON'T NECESSARILY MEAN ATTRACTIVE SAYS VESSELS VALUE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With ship prices plunging by double-digits in the past few years, many ship owners are pondering their next moves in a market often described as att ...
Thursday, 14 March 13
SUPRAMAX : INDO - INDIA TRIP RATE IS AROUND $10,000; SOUTH CHINA $9500 - FEARNRESEARCH
Handy
Indian market is still quiet in respect of export of iron ore. WC India market has improved with a few stems out of the MEG, WC India opening ...
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- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
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