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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, 09 November 12
SHIP OWNERS TURN TO SECOND HAND VESSELS, WHICH COME AT ATTRACTIVE PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The attractiveness of modern second hand vessels, which are often priced aggressively can't be ignored by cash-rich ship owners, who are taking adv ...
Thursday, 08 November 12
LARGE ECO SUPRA : INDO - INDIA NOW FIXED AT USD 11K FOR DELIVERY SINGAPORE - FEARNLEYS
Handy
The Atlantic market continues to remain weak with rates further softening on FH. Rates from USG to Feast were around USD 14k and Black Sea to ...
Thursday, 08 November 12
DRY BULK MARKET RETREATS AGAIN ON HIGHER SHIP SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In further evidence of a latest round of dry bulk shipping misery, the industry's benchmark fell for the 11th straight session yesterday, as the in ...
Thursday, 08 November 12
JOIN CHINA STEAM COAL SUPPLY - DEMAND FORUM
Join China Steam Coal Supply-Demand Forum & Visit Shenhua Yudean Zhuhai Port Coal Terminal
Press Release - Organized by CBI BIZ and suppo ...
Wednesday, 07 November 12
NEWBUILDING ORDERING ACTIVITY ON A STEADY PACE PRIOR TO THE END OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding orders, which to many involved in the shipping industry, are the main reason of today's low freight rates and subsequent financial prob ...
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- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Planning Commission, India
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
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