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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, 16 September 12
GLOBAL LOW DEMAND ; INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS DIP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.345 percent W-O-W on Friday, 14 September 2012, closing but gai ...
Sunday, 16 September 12
THE FREIGHT RATES FROM INDONESIA TO INDIA EXPECTED TO BE STEADY - VISTAAR
COALspot.com - The freight market was mixed with most indices closing positive except for the Panamax index.
The main sentiment seems to be ...
Saturday, 15 September 12
FINANCE MINISTRY OPPOSES TAX INCENTIVE PLAN FOR COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry has turned down the idea of providing a fiscal incentive to the country’s coal mining ind ...
Friday, 14 September 12
DRY BULK MARKET LOOKS TOWARDS CHINA FOR SOME POSITIVE NEWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market freight rates submerged underwater for a large part of the year, dry bulk owners are looking for some positive enhancement ...
Friday, 14 September 12
GOVT OFFERS CONDITIONAL TAX HOLIDAY TO AILING COAL MINERS - JP
The Jakarta Post, one of the leading English news paper in Indonesia reported that, acknowledging difficulties encountered by coal miners due to a p ...
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- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Planning Commission, India
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
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