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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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Thursday, 04 October 12
CAPESIZE : IN SPITE OF THE HOLIDAYS IN CHINA, RATES ARE CLIMBING UP - FEARNLEYS AS
Handy
Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Continent to east Med were around USD 13k and Black ...
Wednesday, 03 October 12
BARCLAYS'S PRICE FORECAST FOR NEWCASTLE COAL HAS BEEN WRITTEN DOWN
“ The main story in the global coal markets has been the growth in supply, with all of the major exporters adding volumes into a market which ...
Sunday, 30 September 12
SUB-BIT INDONESIA COAL SWAPS: MIXED TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 0.73 percent w-o-w but gained 0.41 percent d-o-d on Friday, 28 Se ...
Sunday, 30 September 12
INDONESIA HAS NO PLAN TO CAP COAL PRODUCTION
COALspot.com - “The current low coal prices were mainly due to a global oversupply condition, spurred by numerous mining exploitations in the ...
Sunday, 30 September 12
FREIGHT MARKET UNDER PRESSURE; OVERALL SENTIMENTS ARE STILL BEARISH
COALspot.com - The freight market seemed to have lost steam and all indices were down except for cape index.
The BDI was slightly down by 6 point ...
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- Chettinad Cement Corporation Ltd - India
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- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
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- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- The Treasury - Australian Government
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- Economic Council, Georgia
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- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
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- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
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- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Posco Energy - South Korea
- Romanian Commodities Exchange
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