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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, 18 May 12
EXPORT TAX WILL ERODE PROFITS, INDONESIAN COAL EXEC COMPLAINS - THE JAKARTA GLOBE
The Jakarta Globe reported that, A 20 percent export duty the government has imposed on 14 mineral ore products will not only take a toll on mining ...
Friday, 18 May 12
KOREA EAST WEST POWER LOOKING FOR TOTAL 2.6 MILLION TONS OF 4600 NAR COAL AT FIXED PRICE FOR 5 YEARS
COALspot.com - Korea East West Power Co., Ltd is inviting bids to supply of 520,000 Metric Tons (per annum) of minimum 4,600 kcal/kg coal of N ...
Friday, 18 May 12
NICKEL ORE CARGOES ARE NOT SEEN IN MARKET ANYMORE DUE TO ON-GOING INDONESIAN BAN - FEARNLEYS AS
Handy
The market remained variable.
Fronthaul voyages both from Baltic and Black Sea paid over USD 18k/day. From USG to Cont tonnage would get ...
Thursday, 17 May 12
COAL MINERS OPPOSE EXPORT TAX, SUGGEST OUTPUT QUOTA - THE JAKARTA POST
The Jakarta Post reported that, coal miners have suggested that the government apply a production quota instead of implementing an export tax in ord ...
Thursday, 17 May 12
DRY BULK MARKET STILL LOOKING FOR NEW DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on moving sideways during this week, with the mixed performance across all segments. Yesterday, the industry’s be ...
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- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Parliament of New Zealand
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Romanian Commodities Exchange
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
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