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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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Wednesday, 10 October 12
TAPPING OPPORTUNITIES WITHIN GLOBAL ECONOMIC PERSPECTIVE
Press Release: Mining sector will continue to play a significant role in supporting industrial and economic development in Indonesia which is curren ...
Tuesday, 09 October 12
REALM RESOURCES RECOMMENCES DRILLING AT KATINGAN RIA COAL PROJECT
COALspot.com : Realm Resources Ltd. (ASX) has announced that it has commenced work on the phase three technical programme at its Katingan Project in ...
Sunday, 07 October 12
INDONESIAN GOVERNMENT DECLARED HBA FELL AGAIN IN OCTOBER
COALspot.com - The Indonesian government’s declared coal reference price has lost US$ 0.17 per MT M-M.
The monthly coal referen ...
Saturday, 06 October 12
CFR SOUTH CHINA COAL SWAPS FOR DECEMBER'13 DELIVERY GAINED 1.3 PERCENT W-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery gained 0.098 percent and 0.164 percent W-W and D-D respectively o ...
Saturday, 06 October 12
FREIGHT MARKET IS LIKELY TO PICK AFTER THE HOLIDAYS IN CHINA - VISTAAR
COALspot.com - The freight market appeared to be seeing some increase BDI up by 14.23 pct closing at 875 points. The Cape and Panamax index also saw ...
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- Bukit Makmur.PT - Indonesia
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- White Energy Company Limited
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
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- Australian Commodity Traders Exchange
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- Planning Commission, India
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- Miang Besar Coal Terminal - Indonesia
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- MS Steel International - UAE
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- Agrawal Coal Company - India
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- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
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- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
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- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
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- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
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- PetroVietnam Power Coal Import and Supply Company
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- McConnell Dowell - Australia
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- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
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- Metalloyd Limited - United Kingdom
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- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
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- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
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- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
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