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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, 28 July 12
CAL 2013 COAL SWAPS ARE HIGHER COMPARED TO SEPT 2012 PRICES
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 0.47 percent on Friday (27 July 2012) closing DoD but lost 0.90 ...
Friday, 27 July 12
PACIFIC MARKET REMAINED FLAT - FEARNLEYS AS
Handy
The Atlantic market continued its downward trend from last week with what appears to be a summer lull across the board. A trip from the USG t ...
Wednesday, 25 July 12
BUKIT ASAMS H1 REVENUE JUMPED BY 13 PERCENT
COALspot.com - PT Bukit Asam (Persero), Tbk., the state owned coal miner's revenue in H1 2012, has jumped 13 percent to IDR 5.79 trillion (approxim ...
Wednesday, 25 July 12
BUMI RESOURCES MINERALS SECURED PINJAM PAKAI FOR ITS ZINC AND LEAD PROJECT
COALspot.com - PT Bumi Resources Minerals Tbk. ("BRMS" or "the Company") today reported that its 80% owned subsidiary, PT Dairi ...
Tuesday, 24 July 12
SHIP OWNERS WAITING FOR SHIP PRICES TO FALL FURTHER BEFORE MOVING IN MORE AGGRESSIVELY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the summer season already well under way and many ship owners getting ready for the autumn, the sale & purchasing activity of second hand v ...
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- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
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- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
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- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- The University of Queensland
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Planning Commission, India
- Mjunction Services Limited - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Parliament of New Zealand
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
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