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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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Friday, 22 June 12
GLOBAL ACTION NEEDED ON ENERGY POVERTY - WORLD COAL
Eradicating energy poverty is possibly the biggest challenge facing the world today. Like climate change it can only be addressed with a concerted g ...
Friday, 22 June 12
COAL: THE BACKBONE OF MODERN ELECTRICITY - ECOAL
Coal has been described as the "forgotten fuel," perhaps because many aren't aware of the huge role it plays in powering the global econo ...
Thursday, 21 June 12
DRY BULK MARKET ON THE RISE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was on the rise once again yesterday, with the Baltic Dry Index (BDI), the industry’s benchmark, rising by 18 points, or 1 ...
Wednesday, 20 June 12
BDI MOVING HIGHER, PANAMAX AND SUPRAMAX VESSELS STRONGER, CAPESIZE RATES NEAR TO HISTORICAL LOWS OF DECEMBER 2008 - MARIA BERTZELETOU, HELLENIC SHIPPING
The dry market seems to follow the dynamic of the previous week with the Baltic Dry Index showing daily increases since June 8th, but is still stand ...
Tuesday, 19 June 12
SMALLER DRY BULK CARRIERS LIFT UP MARKET, PANAMAXES SET TO FALL SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Another rise for the dry bulk market was evident yesterday, as the industry’s benchmark, the BDI (Baltic Dry Index) was up for a ninth straigh ...
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- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Parliament of New Zealand
- ICICI Bank Limited - India
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
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