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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, 30 November 12
IS INDONESIAN COAL INDUSTRY DEPENDS HEAVILY ON INDIA AND CHINA?
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 35,143,587* tons of coal in October 2012. October exports are 19 ...
Thursday, 29 November 12
BUMI TO PRODUCE 100 MILLION TONS OF COAL BY 2014
COALspot.com - Expansions on both BUMI’ s subsidiaries, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia ( Arutmin) , are ...
Thursday, 29 November 12
PANAMAX : A FAIRLY STEADY MARKET WITH USD 8.5-9K/DAY FOR 2 LADEN LEGS IN ATLANTIC - FEARNLEYS
Handy
The Atlantic market continues to remain quiet due to more supply of ships. Rates from USG to Far East were around USD 18k and Black Sea to Fa ...
Thursday, 29 November 12
DRY BULK MARKET SLIGHTLY HIGHER DESPITE LULL ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market was marginally higher yesterday, according to the industry's benchmark, the Baltic Dry Index (BDI), which rose by 7 points to 1 ...
Wednesday, 28 November 12
NEWBUILDING ORDERING PICKS UP AS SHIP OWNERS LOOK TO CLOSE DEALS BEFORE THE END OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners are active once again in the newbuilding ordering market, as they look to clinch deals ahead of the end of the year. Once again their fo ...
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- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- CNBM International Corporation - China
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
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