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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, 26 October 12
DRY BULK MARKET FALLS ON WORRIES THAT RECENT RALLY WILL BE SHORTLIVED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market retreated yesterday as a result of a plunge of the Capesize dry bulk carriers' segment, after their latest rally. As a result, ...
Tuesday, 23 October 12
INDONESIA SETS DMO FOR NEXT YEAR
COALspot.com - The Indonesian government has declared the quantity of coal to be supplied to domestic market in 2013 recently under DMO regulation. ...
Sunday, 21 October 12
BUMA HAS PRODUCED 25.0 MILLION TONS OF COAL YEAR TO DATE
COALspot.com - PT Delta Dunia Makmur Tbk., has removed 33.2 million bcm* (+5.5% YoY) of Overburden in September 2012 totaled while coal produc ...
Saturday, 20 October 12
SUPRAMAX FREIGHT EXPECTED TO BE FLAT - VISTAAR
COALspot.com - The shipping market continued to be quite active with quite lot of cargoes fixed for in the cape and panamax sector.
The BDI was ...
Thursday, 18 October 12
INDO-INDIA, LARGE ECO SUPRA FIXED AT USD 11000 - FEARNLEYS AS
Handy
Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Cont to East Med were around USD 14k and Black Sea ...
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- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Parliament of New Zealand
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- The University of Queensland
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Minerals Council of Australia
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
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