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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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Tuesday, 06 November 12
NOVEMBER 2012 HBA $35.21 LOWER THAN A YEAR AGO
COALspot.com - The Indonesian government’s declared coal reference price for November’ 12 has lost US$ 4.60 per MT M-o-M.
...
Sunday, 04 November 12
SUB-BIT INDONESIA COAL SWAPS FOR DECEMBER' 12 DELIVERY FALLS TO $ 59.78
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery fell -1.02 percent on WoW but gained 0.08 percent on D-D on Friday, 2 ...
Saturday, 03 November 12
THE SUPRAMAX FREIGHT EXPECTED TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - This week the market remained soft with all the sectors soft.
The BDI and was down by 6 pct closing at 986 points. The cape index ...
Saturday, 03 November 12
DEMOLITION IS THE KEY FOR DRY BULK SHIPPING'S RECOVERY SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With the number of new building deliveries so far in 2012 already having surpassed the total of 2011, it's more than clear that the dry bulk sector ...
Thursday, 01 November 12
INDONESIA HAS REVISED DOWN ITS 2012 DOMESTIC MARKET OBLIGATION REQUIREMENT FOR COAL
COALspot.com - Minister of Energy and Mineral Resources of Indonesia has revised down its 2012 domestic market obligation requirement due to lower d ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Minerals Council of Australia
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Australian Coal Association
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- The University of Queensland
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
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