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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, 25 August 12
FREIGHT RATES ARE EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - This week the indices showed some signs of improvement will all the segments moving up except for the handy size.
The BDI was marg ...
Saturday, 25 August 12
INDONESIAN COAL SWAP REMAINS STABLE AT LOW LEVEL
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery gain 0.804 percent W-o-W on Friday (24 August 2012) closing but lost 0. ...
Thursday, 23 August 12
INDONESIA-INDIA, LARGE ECO SUPRA FIXED AT USD 6K FOR DELIVERY SOUTH CHINA - FEARNLEYS AS
Handy
The market continued the same trend as last week, low activity and holidays in some countries.
Rate wise unchanged, with US Gulf/Continent ...
Thursday, 23 August 12
EGCO GROUP EXPANDS TOWARDS INTEGRATED ENERGY BUSINESS WITH INVESTMENT IN INDONESIAS COAL MINE
Electricity Generating Public Company Limited or EGCO Group, the Thailand’s first Independent Power Producer has continually invaded foreign m ...
Thursday, 23 August 12
EGCO GROUP ANNOUNCES 2 BILLION BAHT PROFITS IN Q2/2012
Successfully Establishes Integrated Energy Business and Strengthen Investments in ASEAN
Mr. Sahust Pratuknukul, President of Electri ...
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- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Malabar Cements Ltd - India
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
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- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
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- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- CNBM International Corporation - China
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
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- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
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- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
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