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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, 28 February 13
INDIA HAS INCREASED CUSTOMS DUTY AND COUNTERVAILING DUTY FOR POWER PLANT COAL
COALspot.com : The government of India raised basic customs duty and countervailing duty on steam coal. In the meantime government has reduced& ...
Thursday, 28 February 13
SHIP OWNERS EXPECTED TO FACE A CHALLENGING YEAR, DESPITE THE FALL OF NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Tonnage oversupply and a lagging growth in world trade demand are expected to keep shipping in the "red", despite a series of measures ado ...
Thursday, 28 February 13
PANAMAX : MARKET HAS SEEN A GOOD UPTURN OVER THE LAST WEEK - FEARNLEYS
Handy
The Atlantic saw more cargoes than last week and rates ticking upwards. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 11k. The ...
Wednesday, 27 February 13
NEWCASTLE PORT IN AUSTRALIA SHIPPED 0.358 MILLION MT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,178,869 MT of thermal and coking coal for week ended 0700 hours 25 February 2013, Newc ...
Wednesday, 27 February 13
NEWLEAD HOLDINGS LTD. ANNOUNCES COAL SUPPLY AND DELIVERY CONTRACT
NewLead Holdings Ltd. yesterday announced that the Company has signed an agreement to supply and deliver 1.48 million metric tons of steam coal to a ...
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- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
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- Australian Coal Association
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
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- LBH Netherlands Bv - Netherlands
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- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
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