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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, 13 September 12
PANAMAX: THE NEGATIVE TREND, POOR SENTIMENT CONTINUES - FEARNLEYS AS
Handy
Lack of cargoes and a growing list of available ships is causing rates to slip for all Atlantic trades.
The only trade keeping somewhat s ...
Thursday, 13 September 12
FUEL EFFICIENT SHIPS MAY BE MORE EXPENSIVE, BUT THEY MAKE FINANCIAL SENSE SAYS ANALYSIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest trend in shipbuilding is the so called "Eco" ship, i.e. ships which offer much better fuel consumption and are more cost-effect ...
Wednesday, 12 September 12
INDIAS COALGATE: TIME FOR A ROOT CANAL
A recent report from India’s Comptroller and Auditor General (CAG) pertaining to the allocation of coal blocks has created a political storm i ...
Tuesday, 11 September 12
CLOUDY AND POLICY RISK INDONESIAN COAL INDUSTRY
COALspot.com - Bahana Securities in its latest coal outlook, commented on the Indonesian coal market, with economic slowdown in the four largest coa ...
Tuesday, 11 September 12
SHIP OWNERS KEEN ON SECOND HAND VESSEL PURCHASES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With most ship owners back from their summer rest, things are starting to pick up again in the second hand vessel market, with more and more deals b ...
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- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Minerals Council of Australia
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- White Energy Company Limited
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
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