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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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Friday, 15 February 13
2ND ANNUAL INDONESIA MINING 2013 CONFERENCE
Bringing Indonesia's Mining Stakeholders Together Towards Improving Mining Investment Climate & Operations
Following the success of th ...
Friday, 15 February 13
SCRAPPING TO RISE AS BULKER OWNERS SUFFER - DREWRY MARITIME RESEARCH
Drewry's latest Dry Bulk Forecaster report suggests that cash-strapped shipowners will scrap younger and younger ships this year as the dry bulk ma ...
Thursday, 14 February 13
HANDY: ATLANTIC "STABLE"; PACIFIC "QUIET" - FEARNLEYS
Handy
The Atlantic remain stable with rates for FH from USG around USD 18k. The Pacific remains quiet due to Chinese New Year holidays. Rates were ...
Thursday, 14 February 13
BIMCO FORECASTS MOSTLY HIGHER DRY BULK RATES FOR THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Higher steel demand is expected to keep dry bulk rates elevated during the next six weeks, according to the latest BIMCO forecast. The Organization ...
Wednesday, 13 February 13
6TH ANNUAL CBM CONFERENCE
The 6th Annual CBM conference which will be held in Singapore on 18-21 June 201 offers comprehensive insights into leading CBM projects in the Asia- ...
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- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Parliament of New Zealand
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- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
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