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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, 12 October 12
INVESTMENT OPPORTUNITIES OCCUR IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although 2012 has by now evolved into one of the most challenging years for global shipping industry, ship owners are scouting the second hand ship ...
Thursday, 11 October 12
SINGAPORE BASED COAL SOURCE AND SHIPPING BAGS 300K MT IMPORTED COAL SUPPLY CONTRACT FROM TNPL
COALspot.com - India-based paper manufacturer Tamil Nadu Newsprint and Papers Limited has awarded a tender for 300,000 mt of imported steam co ...
Thursday, 11 October 12
PANAMAX : SINCE LAST WEEK RATES HAS FIRMED FOR ALL TRADES - FEARNLEYS AS
Handy
The Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Continent to East Med were around USD 14k and B ...
Thursday, 11 October 12
DRY BULK MARKET STEADY AFTER CHINESE HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn't yet staged a solid rebound after last week's holidays in China, as many would have expected. Indeed, many analysts were ...
Wednesday, 10 October 12
NEW BUILDING MARKET ON A QUIET WEEK, DUE TO ASIAN HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The newbuilding ordering activity has been more than quite during the course of the past week, as a result of holidays in both Korea and China. Acco ...
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- Interocean Group of Companies - India
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
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