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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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Sunday, 06 January 13
FREIGHT MARKET REMAINED FAIRLY STEADY - VISTAAR
WISH YOU ALL HAPPY NEW YEAR
COALspot.com - The freight market remained fairly steady in spite of Christmas / New Year Holidays. The BDI was almos ...
Saturday, 05 January 13
THE SHIPPING MARKET IN 2012 AND LOOKING FORWARD - BIMCO
Global Economy: Things will go up from here
The global economy continues to grow, albeit at a slower pace than previous years. The slower economic ...
Friday, 04 January 13
DRY BULK MARKET LOOKING FOR DIRECTION IN FIRST TRADING DAYS OF THE NEW YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market is actively looking for its footing at the start of the New Year, as charters have been scarce, as is usually the case during th ...
Thursday, 03 January 13
INDONESIAN SUB-BITUMINOUS COAL SWAPS CLOSED US$ 6.86 HIGHER FOR 2014 DELIVERY
COALspot.com - Swaps prices were changed positively for thermal coal for loading in the first quarter from Indonesia, according to SGX AsiaClear OTC ...
Thursday, 03 January 13
SUPRMAX FREIGHT RATE FROM RED SEA / INDIA IS AROUND MID TEENS - FEARNLEYS
Fearnleys in its weekly report said that, Indian market was very quiet in respect of export of iron ore. For Indo-India trip Supra rate was hovering ...
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- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Planning Commission, India
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
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