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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, 01 June 12
COKAL ACCEPTED ON THE CLEAN AND CLEAR LIST FOR ITS BORNEO BARA PRIMA AND BUMI BARITO MINERAL PROJECTS
- Borneo Bara Prima (BBP) Project confirmed on the Clean and Clear List 9th May 2012
- Bumi Barito Mineral (BBM) Project confirmed on the Clean and ...
Friday, 01 June 12
ADARO BUYS MAJORITY STAKE IN AFFILIATED BHAKTI ENERGI - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk entered into an option to provide a convertible loan of up to US$500 million for a period of 3 ye ...
Thursday, 31 May 12
DRY BULK MARKET UNABLE TO FIND NEW SUPPORT TO REACH HIGHER LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been unable to find new support and recover to higher levels during these past few days. As a result, the Baltic Dry Index ( ...
Wednesday, 30 May 12
ORPHEUS RAISES $2.24M TO ADVANCE INDONESIAN COAL PRODUCTION ASSETS
• $2.24 million raised from a placement to new and existing institutional and sophisticated investors from Australia and overseas
• Funds ...
Wednesday, 30 May 12
ARPENI SECURES TRANSSHIPMENT CONTRACT FROM BARUNA DIRGA
Insider Stories reported that, shipping operator PT Arpeni Pratama Ocean Line Tbk (APOL) has secured a 1-year coal transhipment contract of 4 millio ...
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- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Minerals Council of Australia
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Planning Commission, India
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- The University of Queensland
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Aditya Birla Group - India
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
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