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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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Monday, 28 May 12
COAL EXPORTS ARE JUMPING HIGHER, BUT PRICES ARE FALLING LOWER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31.86* million tons of coal in April 2012, compared to 30.64* million tons i ...
Sunday, 27 May 12
THE FREIGHT MARKET FROM INDONESIA TO INDIA WAS WEAK - VISTAAR
COALspot.com - The BDI continued to fall for the fourth straight week and the BDI fell by 9.38 pct this week closing at 1,034 points.
The Cape Si ...
Sunday, 27 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS HEADING TO SOUTH DIRECTION
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries have dropped this week by 5.43 percent an ...
Saturday, 26 May 12
DRY BULK SHIP OWNERS LOOKING TO CUT BACK ON TONNAGE SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of dry bulk carriers has been the most prominent problem in the market today, pushing down rates and ‘strangling’ profita ...
Thursday, 24 May 12
DRY BULK MARKET RETREATS ON LACK OF CHINA DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market retreated yesterday on the back of lower Chinese demand for commodities such as coal and iron ore, typically hauled by dry bulk ...
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- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Planning Commission, India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
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