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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, 08 June 12
MINISTER DENIES COAL EXPORT TAX PLAN, ENDORSES RESTRICTIONS - THE JAKARTA POST
The Jakarta post, one of the leading english news paper in Indonesia reported that, Energy and Mineral Resources Minister Jero Wacik has denied that ...
Friday, 08 June 12
NO IMMEDIATE IMPACT ON ADARO'S RATING FROM BEP TRANSACTION - FITCH RATINGS
Fitch Ratings has said that PT Adaro Indonesia's (Adaro, 'BB+'/ Stable) ratings are not immediately affected by its parent PT Adaro Energy Tbk's ...
Thursday, 07 June 12
DRY BULK MARKET FALLS FOR 10 STRAIGHT SESSION ON OVERSUPPLY PROBLEMS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A resurgence of oversupply, coupled with national holidays in various parts of the world has contributed to yet another fall of the dry bulk market ...
Thursday, 07 June 12
COAL EXPORT TAX NOT RATIONAL: MINISTER - THE JAKARTA POST
Trade Minister Gita Wirjawan has criticized as irrational the idea to restrict coal exports by imposing an export tax, According to The Jakarta post ...
Thursday, 07 June 12
BY 2022 PLN IS EXPECTED TO BURN AROUND 125 MILLION TONS OF COAL
COALspot.com - Indonesia's state owned electricity company's (PLN) coal consumption is expected to reach 125.7 million tons by 2012.
Nur Pamudj ...
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- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
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- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- MS Steel International - UAE
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
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- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
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- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
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- Minerals Council of Australia
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- Mjunction Services Limited - India
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- Coalindo Energy - Indonesia
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- Agrawal Coal Company - India
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- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Australian Coal Association
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- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
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- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Planning Commission, India
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
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