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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, 17 June 12
S7 & S8 ROUTES ARE LIKELY TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI gained some increase after continues fall for several weeks.
The BDI increased by 47 points (up by 5.36 pct) closing at 92 ...
Saturday, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, alth ...
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- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- CNBM International Corporation - China
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- The University of Queensland
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Australian Coal Association
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
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