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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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Wednesday, 18 July 12
SHIP PRICES HAVE FALLEN RAPIDLY THIS YEAR, FAVORING INVESTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The price for a 5 year old Capesize dry bulk carrier of 172,000 dwt has fallen to about $33,4mil from $42.9 at the end of June 2011, while at end of ...
Saturday, 14 July 12
FREIGHT MARKET SEEMS TO BE QUITE VOLATILE - VISTAAR
COALspot.com - The market seems to be quite volatile with the trend changing almost every week. This week all the segments were down except for Pana ...
Friday, 13 July 12
TRANSCOAL MINERGY HAS RECEIVED PMA STATUS IN INDONESIA
COALspot.com - PT Transcoal Minergy (“TCM”) has received official foreign owned company status from the Capital Investment Coordinating ...
Thursday, 12 July 12
LACK OF CAPESIZE DEMAND DRAGS DRY BULK MARKET LOWER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A lack of demand for the larger Capesize dry bulk carriers had as a result the fall of the industry’s benchmark, the BDI (Baltic Dry Index), w ...
Thursday, 12 July 12
RIO TINTO'S SENIOR MANAGEMENT CHANGES
COALspot.com - Rio Tinto is making changes to its senior management team as chief financial officer (CFO) Guy Elliott has decided to retire at the e ...
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- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
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- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
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- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
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