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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, 08 May 12
DRY BULK MARKET LOOKING FOR NEW DIRECTION THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) the main benchmark of the dry bulk shipping industry not traded at the start of this week, traders, charterers and s ...
Monday, 07 May 12
INDONESIAN HBA FALL AGAIN IN MAY 2012
COALspot.com - Indonesian HBA fall again to lowest level since January 2011 in May 2012. The monthly coal reference price for coal sales in Ma ...
Sunday, 06 May 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA SWAPS SLIGHTLY DROP THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries slightly dropped this week.
According ...
Sunday, 06 May 12
S7 & S8 ROUTES LIKELY TO BE FIRM NEXT WEEK VISTAAR SINGAPORE
COALspot.com - The BDI remained flat this week and was up just by 1 point closing at 1,157 points.
The cape size index was up by 5.14 pct closing ...
Sunday, 06 May 12
EXPORT DUTY ON MINERAL FINALLY TO BECOME EFFECTIVE NEXT WEEK
COALspot.com - Mineral ore exporters of Indonesia ( only IUP holders) are required to obtain recommendation letter from the energy and mineral ...
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- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Planning Commission, India
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- SMC Global Power, Philippines
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- The University of Queensland
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