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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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Tuesday, 07 August 12
2ND ANNUAL FLOATING TERMINALS
Press Release - After a ground breaking and successful launch in 2011, the 2nd Annual Floating Terminals conferenceis back to address innovation, co ...
Tuesday, 07 August 12
KRISHNAPATNAM PORT HAS DISCHARGED 122,247 MTS OF COAL IN JUST 24 HRS
COALspot.com - Keeping with the tradition of the new records that are set at the Olympic Games 2012, Krishnapatnam Port has also achieved in setting ...
Tuesday, 07 August 12
THE JAKARTA POST EDITORIAL: REVISITING THE MINING LAW
The Jakarta post, one of the leading English news paper in Indonesia writes in its editorial today, what the domestic and foreign investors had drea ...
Tuesday, 07 August 12
BARAMULTI SET TO LIST ON BOURSE IN Q4 - JP
The Jakarta Post reported that, coal miner PT Baramulti Sukses Sarana is preparing to make its shares available to the public in the fourth quarter ...
Tuesday, 07 August 12
REALM RESOURCES COMPLETES STUDY ON ITS KATINGAN RIA COAL PROJECT
COALspot.com - Realm Resources Ltd. has announced that it has completed the Project Study for the Katingan Ria Project in Central Kalimantan, Indone ...
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- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
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- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Parliament of New Zealand
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- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
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- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
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- Eastern Coal Council - USA
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- PTC India Limited - India
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- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
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- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
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- Georgia Ports Authority, United States
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Meenaskhi Energy Private Limited - India
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- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- White Energy Company Limited
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
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- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
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- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
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- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Posco Energy - South Korea
- VISA Power Limited - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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