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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, 28 September 12
DRY BULK SECOND HAND VESSELS ON HIGH DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the demise of the dry bulk market and the collapse of freight rates since the beginning of 2012, on the back of record breaking newbuilding ...
Thursday, 27 September 12
MINING RE-COMMENCES AT ORPHEUS' B2 EAST KALIMANTAN COAL PROJECT
- B2 project overburden removal completed and coal exposed
- Coal getting has commenced with target production of 30,000tpm
- Orpheus to re ...
Thursday, 27 September 12
HANDY: THE PACIFIC MARKET IS GETTING WEAKER WITH UPCOMING GOLDEN WEEK HOLIDAYS - FEARNLEYS AS
Handy
Yet another week with rates softening in all trades. Especially owners with ships open Continent struggle to find employment paying decent mo ...
Thursday, 27 September 12
DRY BULK MARKET LOSES STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The rise of the BDI (Baltic Dry Index), the dry bulk industry’s benchmark during the course of the previous week, proved to be short-lived, as ...
Wednesday, 26 September 12
NEWBUILDING ORDERING ACTIVITY REMAINS SUBDUED ON GLOBAL MARKET UNCERTAINTY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding ordering activity has been on the down side during the past few weeks, a trend also noticeable during the course of the past few days, a ...
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- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Planning Commission, India
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
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- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- Indian Oil Corporation Limited
- MS Steel International - UAE
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
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