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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, 04 May 12
DEMOLITION KEY FOR DRY BULK MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The overflow of newbuilding vessels which “spilled over” into 2012 from 2011 brought the dry bulk market to a near collapse level at the ...
Thursday, 03 May 12
DRY BULK MARKET REMAINS INACTIVE, POSTING MILD DECREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept retreating this week, although at a very low pace, on the back of a lull in demand. The industry's benchmark, th ...
Thursday, 03 May 12
MINERS DEMAND LEGAL CERTAINTY ON PRE-BAN INTERIM POLICY - THE JAKARTA POST
The Jakarta Post reported that, Mining companies represented by the Indonesian Mining Association (IMA) welcomed the government’s plan to impo ...
Thursday, 03 May 12
HANDY EAST COAST INDIA - CHINA AROUND USD 7000 - FEARNLEYS AS
Handy - Stable demand in the Atlantic offered good rates for the tonnage.
USG/Cont was worth USD 17500 and more. Baltic and Black Sea appeared to ...
Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem f ...
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- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Australian Coal Association
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
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