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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, 09 December 12
LOW DEMAND PUSHES CHARTER RATES TOWARDS DOWN - VISTAAR
COALspot.com - The freight market has softened and BDI, The Baltic Dry Index, a measure of shipping costs for dry bulk goods, plunged below 10 ...
Friday, 07 December 12
A NEW PHASE FOR AUSTRALIAN RESOURCES - A FITCH STREET INTERVIEW
This week Matt Jamieson spoke with Andrew Colquhoun in Fitch's Asian sovereign rating team, and Vicky Melbourne, Fitch's commodity analyst based i ...
Friday, 07 December 12
SHIPPING INDUSTRY LOOKING ON YET ANOTHER TOUGH YEAR AS WE APPROACH 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With shipping finance "on the ropes" as traditional lenders appear to be cutting their losses and tonnage oversupply still the most import ...
Thursday, 06 December 12
PANAMAX : THE POSITIVE VIBES IN THE ATLANTIC REMAINS - FEARNLEYS AS
Handy
The Atlantic market is still depressed with dearth of cargoes and more ships. The trips from Continent to Feast fixed around USD 12k. Trips f ...
Thursday, 06 December 12
STRONG CHINESE DEMAND FOR DRY BULK COMMODITIES EXPECTED FOR 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A new analysis from BIMCO released yesterday suggests that 2013 is expected to be a stronger year in terms of China's "hunger" for commod ...
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- Agrawal Coal Company - India
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
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- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- White Energy Company Limited
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- Sical Logistics Limited - India
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- The University of Queensland
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
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