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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, 21 February 13
SPRING COAL PROCUREMENT 2013 IS ABOUT TO TAKE PLACE
In 2012, “Steady Growth” had set the keynote for China’s economic development. Guided by the principle of progressing steadily, do ...
Wednesday, 20 February 13
BAKRIE GROUP LOOKS TO HAVE A CLEAR UPPER HAND - LUCKY ARIESANDI, CFA
The Bakrie-Rothschild saga is entering its final stage, with Bumi Plc (BUMI LN)’s holders to convene on 21 Feb at 11am GMT to vote on Nat Roth ...
Tuesday, 19 February 13
NEWCASTLE PORT SHIPPED 38.65 PERCENT LESS COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 1,820,559 MT of thermal and coking coal for week ended 0700 hours 18 February 2013, Newc ...
Monday, 18 February 13
78.75 MILLION TONS OF COAL RESERVES ARE NEWLY PROVEN IN WUGANG HUNAN PROVINCE
COALspot.com - Recently, Wugang City, known as the CHINA hundred key coal producing cities, achieved new breakthroughs in coal exploration: deep coa ...
Sunday, 17 February 13
STEEL DEMAND WILL HELP TO PUSH UP FREIGHT RATES - VISTAAR
COALspot.com - This freight market has been fairly steady week ended 15 February 2013.
The BDI was slightly up by 0.67 pct closing at 753 points ...
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- Interocean Group of Companies - India
- White Energy Company Limited
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- London Commodity Brokers - England
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- Altura Mining Limited, Indonesia
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- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
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- The State Trading Corporation of India Ltd
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- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
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- Ministry of Finance - Indonesia
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- Sojitz Corporation - Japan
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- India Bulls Power Limited - India
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- Timah Investasi Mineral - Indoneisa
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- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
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- Independent Power Producers Association of India
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- Commonwealth Bank - Australia
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- Central Electricity Authority - India
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- Eastern Coal Council - USA
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- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
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- Bulk Trading Sa - Switzerland
- Planning Commission, India
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- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
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- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
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- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Economic Council, Georgia
- McConnell Dowell - Australia
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- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
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