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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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Sunday, 23 September 12
AN ANOTHER UNSTABLE WEEK FOR INDONESIAN COAL SWAPS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.10 percent and 0.916 percent WOW and DOD respectively ...
Sunday, 23 September 12
INDIA IMPORTED 11.40 PERCENT MORE INDONESIAN COAL IN AUGUST
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 26,451,565* tons of coal in August 2012, compared to 27.88* mill ...
Saturday, 22 September 12
SOFT BUNKER PRICES KEEP INDONESIA TO INDIA FREIGHTS STABLE - VISTAAR
COALspot.com - The freight market overall remained buoyant with all indices up except for Panamax index. The main effect seems to be increased shipm ...
Friday, 21 September 12
SHIP BREAKING ACTIVITY REACHES NEW RECORDS, AS ALREADY 2012 LEVELS HAVE SURPASSED THE WHOLE OF 2011 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The vast oversupply of vessels, most notably in the dry bulk shipping sector, has forced ship owners to intensify their efforts towards recycling th ...
Thursday, 20 September 12
SUPRAMAX : INDO-INDIA ROUNDS WERE AROUND USD 12K - FEARNLEYS
Handy
Not a bad week for Supramax tonnage, if we compare Supramax developments to the bigger size tonnage. The rates have basically remained unchan ...
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- Petron Corporation, Philippines
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- White Energy Company Limited
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Planning Commission, India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- The University of Queensland
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
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