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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, 27 June 12
DIRECTORATE GENERAL OF MINERAL AND COAL OF INDONESIA INTRODUCES ON-LINE SYSTEM FOR MINING PRODUCTS EXPORT APPROVAL
COALspot.com - Directorate General of Mineral and Coal of Indonesia has released "Clear and Clean" certificate for another 33 coal miners ...
Monday, 25 June 12
RIO TINTO MAKES FIRST COAL SHIPMENT FROM MOZAMBIQUE
Rio Tinto has started exporting premium hard coking coal from its Benga Mine in the Moatize Basin in Mozambique. The first shipment of 34,000 tonnes ...
Sunday, 24 June 12
SUPRAMAX FREIGHT MARKET FIRMED UP FROM INDONESIA TO INDIA - VISTAAR
COALspot.com - This week all the segments gained and marked was firm in the Supramax and Handy size sector, where as the Cape and Panamax inde ...
Saturday, 23 June 12
COAL PRICES APPETITE FOR ROLLER-COASTER RIDES
COALspot.com - SGX AsiaClear OTC Coal Swaps have suffered something of a roller-coaster ride in terms of prices during this week. SGX’s Indone ...
Friday, 22 June 12
PRESENT SPOT WEAKNESS IS TEMPORARY, SEASONAL AND RISE AS WINTER APPROACHES - BUMI
COALspot.com - PT Bumi Resources Tbk, the world’s one of the largest coal producer and Indonesia’s largest multi grade coal miner has no ...
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- Latin American Coal - Colombia
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- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Sical Logistics Limited - India
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- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Heidelberg Cement - Germany
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- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
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- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
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- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
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- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Marubeni Corporation - India
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- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- The University of Queensland
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- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
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- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
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- Romanian Commodities Exchange
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- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- White Energy Company Limited
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Australian Coal Association
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
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- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
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