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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, 21 July 12
THE FREIGHT RATES ARE EXPECTED TO BE FLAT TO SOFT NEXT WEEK - VISTAAR
COALspot.com - The freight market was soft this week as all the segments were down.
The BDI was down by 6.58 pct closing at 1,037 points and the ...
Saturday, 21 July 12
INDONESIAN COMPANIES ABM INVESTAMA AND AVRA ASIA WORK OUT LONG-TERM CONTRACT - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading English news papaer in Indonesia reported that, ABM Investama, a company with diversified interests in coal mi ...
Friday, 20 July 12
INDONESIA-INDIA SUPRAS BEING FIXED AT $ 10K
Handy
After a stable last week, the Handysize market has experienced softening rates in the Atlantic. Ships are ballasting from India into the Atla ...
Friday, 20 July 12
HANDYSIZES PROVE RATHER ATTRACTIVE AMONG OTHER SHIPS, IN TERMS OF FUTURE RETURNS ON INVESTMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Handysize segment of the dry bulk market appears to offer the best incentive among other ship types, for a ship owners to invest in, says Interm ...
Wednesday, 18 July 12
TAIWAN POWER COMPANY TO IMPORT 0.588 MILLION TONS OF LOW ASH AND EXTRA LOW SULFUR SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 588,000 MT tons of extra low sulfur sub-bituminous coal for Taipower thermal power plant thro ...
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- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- The University of Queensland
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
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