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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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Sunday, 01 July 12
DSP OF SGX ASIACLEAR OTC COAL SWAP'S THIS WEEKS MOVEMENTS SLIGHTLY POSITIVE
COALspot.com - SGX AsiaClear OTC Coal Swaps have recovered slightly this week and Q4 deliveries are also showing positive direction.
SGX’s ...
Saturday, 30 June 12
THE FREIGHT RATES ARE EXPECTED TO BE STEADY TO FIRM NEXT WEEK - VISTAAR SINGAPORE
COALspot.com – The BDI was up by 2.66 pct (up by 26 points) closing at 1,004 points crossing the 1000 point barrier this week.
The c ...
Friday, 29 June 12
INDONESIAN PRODUCERS ARE PLANNING TO CUT PRODUCTION IF COAL PRICES FALL FURTHER
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 31.54* million tons of coal in May 2012, compared to 31.86* mill ...
Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order ...
Thursday, 28 June 12
DRY BULK MARKET HIGHER ON CAPESIZE OPTIMISM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher yesterday, as the BDI (Baltic Dry Index) ended up by 0.71% to 988 points. Most ship types were up, with the ...
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- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Minerals Council of Australia
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Metalloyd Limited - United Kingdom
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