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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, 30 October 12
NEW BUILDING ORDERING ACTIVITY KEEPS ON RETREATING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have refrained from placing any new orders of vessels during the course of the past few days, according to shipbroker reports. According ...
Monday, 29 October 12
US COAL EXPORTS ARE EXPECTED TO REACH 125 MILLION TONS THIS YEAR - EIA
COALspot.com - US coal exports are expected to reach 125 million tons this year, surpassing the old record of about 113 million tons set in 1981, sa ...
Sunday, 28 October 12
SUB-BIT INDONESIA COAL SWAPS (FOB ) FOR DECEMBER 2012 DELIVERY STAYED FLAT D-D
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery flat on D-D but gained 0.38 percent on W-W on Friday, 26 October 2012, ...
Sunday, 28 October 12
INDONESIA TO INDIA SUPRAMAX FREIGHT MARKET FAIRLY STEADY - VISTAAR
COALspot.com - The Cape size sector continued to remain active with iron ore movement being steady. All other sectors were down.
The BDI was up b ...
Friday, 26 October 12
SHIPPING MARKETS HEADING FOR DIVISION AND MULTI-TIER WILL BECOME THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It seems that something is expected to be fundamentally different in the way that the shipping markets will be operating in the future, according to ...
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- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- The University of Queensland
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Marubeni Corporation - India
- VISA Power Limited - India
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
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