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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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Tuesday, 15 May 12
POTENTIAL BOOM OF CHINAS COAL IMPORTS COULD PROVIDE FURTHER SUPPORT TO DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been moving sideways during the past week with the industry’s benchmark, the Baltic Dry Index (BDI) losing 0.53% on th ...
Saturday, 12 May 12
THE SHIPPING MARKET IS UNLIKELY TO SEE A REBOUND ANYTIME SOON - VISTAAR SINGAPORE
COALspot.com - The BDI softened this week and it was down by 1.64 pct closing at 1,138 points.
The cape index was up by 2.41 pct closing at 1,61 ...
Friday, 11 May 12
POLITICAL CHANGES COULD LEAD TO TEMPORARY HALT IN SHIPPING INVESTMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The potential of changes of political leadership in many of the world’s leading economies could very well lead to significant shifts in the di ...
Thursday, 10 May 12
DRY BULK ERRATIC ON LACK OF DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept up its erratic behavior as it went down again during yesterday’s session, on a lack of direct guidance in terms o ...
Wednesday, 09 May 12
COAL INDIA SIGNS FSAS WITH 13 POWER UNITS SO FAR - PTI
Press Trust of India has reported that, coal India has so far entered into fuel supply pacts with 13 power units, including Reliance Power's Rosa P ...
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- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Planning Commission, India
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Posco Energy - South Korea
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- PTC India Limited - India
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Australian Coal Association
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- The University of Queensland
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Siam City Cement - Thailand
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