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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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Saturday, 08 September 12
INDO INDIA ROUTE FREIGHT FOR SUPRAMAX REMAINS STRONG - CAPT. REDDY
COALspot.com - The freight market overall remained weak and except for cape index all other sectors were down. The biggest drop was in the Panamax s ...
Saturday, 08 September 12
RIO TINTO COMPLETES ACQUISITION OF BHP BILLITON'S INTERESTS IN RICHARDS BAY MINERALS
Rio Tinto has doubled its holding in Richards Bay Minerals (RBM) following the completion of its acquisition of BHP Billiton’s entire inte ...
Friday, 07 September 12
HBA GAINS $ 1.56 PER MT IN SEPTEMBER
COALspot.com - The Indonesian government’s declared coal reference price has gained US$ 1.56 per MT M-o-M. This is the first gain ...
Thursday, 06 September 12
SOME ANCHORED PANAMAX VESSELS WAITING FOR CARGOS TO COME
Handy
According to Fearnleys weekly report, in the smaller segments Fearnleys sees little to no changes since last week. There are still entering s ...
Thursday, 06 September 12
DRY BULK CARRIERS STILL IN HIGH DEMAND AMONG SHIP OWNERS, BUT NEWBUILDING ACTIVITY SLIDES IN AUGUST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The slide of the dry bulk market this year hasn't abated ship owners' appetite for dry bulk carriers, as evidenced by the steady interest expresse ...
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- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Economic Council, Georgia
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Planning Commission, India
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
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