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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, 11 August 12
INDONESIAN COAL REFERENCE PRICE HAS LOST 27.78 PERCENT YOY
COALspot.com - Indonesian HBA fell again in August.
The monthly coal reference price for coal sales this month fell 3.32 percent. HBA fell ...
Saturday, 11 August 12
SUB-BIT INDONESIA COAL SWAPS SEEN MOVING IN THE RIGHT DIRECTION
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 1.29 percent W-o-W on Friday (10 August 2012) closing but lost 1 ...
Friday, 10 August 12
DRY BULK MARKET DROWNING FROM TONNAGE OVERSUPPLY - HELLENIC SHIPPING
The dry bulk market has been overflowing with new building vessels, despite the fact that demand is more or less (and minus the seasonal factors) ri ...
Thursday, 09 August 12
3RD ANNUAL SHALE GAS
Press Release - With the North American shale gas boom, IBC’s 3rd Annual Shale Gas explores optimal strategies to monetize Asia’s domest ...
Wednesday, 08 August 12
EXPLOITASI AIMS TO RAISE RP 2.7T FOR ACQUISITION - THE JAKARTA POST
The Jakarta Post reported that, publicly listed coal miner PT Exploitasi Energi Indonesia (CNKO) is seeking to raise Rp 2.7 trillion (US$286.2 milli ...
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- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Australian Coal Association
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
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