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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, 19 November 12
GOVT PREPARES TO FACE ANOTHER SUIT ON MINING LAW - THE JAKARTA POST
The government is gearing up to face a complaint on the 2009 Mining Law prepared by the same organization that previously brought down upstream oil ...
Monday, 19 November 12
IHS MCCLOSKEY ASIA PACIFIC COAL OUTLOOK CONFERENCE 2012
With the current global oversupply of thermal coal showing no signs of abating and spot prices falling to a two-year low, concerns are growing that ...
Sunday, 18 November 12
INDONESIAN SUB BITUMINOUS COAL SWAPS FOR JANUARY 2013 DELIVERY GAINS 1.29 PERCENT WOW
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for January 2013 delivery gains 1.29 percent WoW and 0.25 percent DoD on Friday, 16 Novembe ...
Saturday, 17 November 12
THE SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA ARE EXPECTED TO BE UP NEXT WEEK - VISTAAR
COALspot.com - This week market sentiments ended positive with all the segments ending higher except for handy size which was almost at same levels ...
Saturday, 17 November 12
RECORD DEMOLITION ACTIVITY SEEKS TO CURB TONNAGE OVERSUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
This year will prove to be another record-breaker in terms of scrapping of older vessels across all shipping segments, as the equally feverish pace ...
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- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- VISA Power Limited - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
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