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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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Thursday, 12 July 12
SOUTHGOBI RESOURCES ANNOUNCES NOTICE OF INVESTMENT DISPUTE FILED AGAINST MONGOLIAN GOVERNMENT
Press Release - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi”) announced today that SGQ Coal Investment Pte. Ltd., a wholly ...
Wednesday, 11 July 12
HBA DROPPED SHARPLY IN JULY
COALspot.com - Indonesian HBA fell to lowest level since September 2010 in July 2012. The monthly coal reference price for coal sales this mon ...
Wednesday, 11 July 12
SUB-BIT FOB INDONESIA COAL SWAP LOST $ 1.26 PER TON
COALspot.com - Sub-Bit FOB Indonesia Coal decline for a second day yesterday, according to SGX AsiaClear OTC Coal Swaps. The prices for shipments to ...
Tuesday, 10 July 12
DRY BULK MARKET RECORDS MODEST GAINS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher on Monday, with the Baltic Dry Index (BDI) ending the session up by 5 points to 1,162. Most markets were hig ...
Saturday, 07 July 12
INDONESIA-JAPAN RELATIONS TURN SOUR - THE JAKARTA POST
The Jakarta Post, the one of the leading Indonesian English new papers reported that, Bilateral relations between Indonesia and Japan have recently ...
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- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- Australian Coal Association
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- The University of Queensland
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
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