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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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Monday, 28 January 13
BAYAN RESOURCES TO SELL 18 MILLION TONS OF COAL TO GNPOWER MARIVELES COAL PLANT
Publicly-listed PT Bayan Resources announced on Friday that it had signed an agreement on coal sales with Philippine-based GNPower Mariveles Coal Pl ...
Sunday, 27 January 13
CFR SOUTH CHINA COAL SWAPS: WEAK
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery has gained 0.31 percent and CFR South China coal shipment&nbs ...
Sunday, 27 January 13
FREIGHT MARKET: FLAT TO SOFT - VISTAAR
COALspot.com - The freight market was soft and all the indices were down except for handy size.
The BDI was down 4.66 pct closing at 798 points.. ...
Friday, 25 January 13
BOTSWANA GOVERNMENT GRANTS COAL LICENSES TO A-CAP RESOURCES LIMITED
A-Cap Resources Limited has announced that it has been granted coal rights within its Bolau tenements which sit next to the Sese Coal and Power Proj ...
Friday, 25 January 13
SMALL ROOM FOR OPTIMISM FOR THE PROSPECTS OF THE DRY BULK MARKET AS NET FLEET GROWTH IS SLOWING DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market didn't manage to post a rebound during the past year, quite the opposite, as a fast fleet growth and slow ...
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- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
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