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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, 01 September 12
PANAMAX FREIGHT RATES UNDER PRESSURE FROM LOW DEMAND - VISTAAR
COALspot.com - This week the freight market was weak with mixed results.
The BDI was down by 1.95 pct closing at 703 points, however there was so ...
Friday, 31 August 12
ADVERSE SHIPPING MARKET CONDITIONS SHORTENS LIFE SPAN OF VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The adverse conditions which have been put in place in the world's freight markets, means that ship owners are forced to scrap vessels of a much yo ...
Thursday, 30 August 12
INDO-INDIA, LARGE ECO SUPRA NOW FIXED AT USD 7K FOR DELIVERY SINGAPORE - FEARNLEYS AS
Handy
The Supra market continued its negative trend with little fresh business entering the market. Continent positions fixed around USD 4k for tri ...
Thursday, 30 August 12
DRY BULK MARKET STILL LOOKING OUT FOR BETTER DAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With things in China moving slowly this week, as a result of holidays, it’s no surprise that the latest positive trend in the dry bulk market ...
Wednesday, 29 August 12
COLOMBIA'S MINING BOOM: PART TWO - JOSEPH KIRSCHKE
One of the most prominent casualties of Canada's entry into the Colombian mining sector has been a priest named Jose Reynal-Restrepo. Last Septembe ...
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- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Semirara Mining Corp, Philippines
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