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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, 20 April 12
PANAMAXES LEAD DRY BULK MARKET TO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A rebound of demand for smaller dry bulk carriers has led the industry’s benchmark, the BDI (Baltic Dry Index) above the 1,000-point mark for ...
Friday, 20 April 12
BUMA HAS PRODUCED 2.6 MILLION TONS OF COAL IN MARCH 2012
COALspot.com - BUMA has removed 28.0 million bcm (+6.4% YoY) of overburden in March 2012 while coal production was at 2.6 million tons (+1.3% YoY).
...
Thursday, 19 April 12
FRESH COAL SALES FROM JATENERGYS JONGKANG MINES
COALspot.com - Energy company Jatenergy Ltd (ASX code JAT) announced today that it had signed a contract for an 11,000 tonne coal sale due for shipm ...
Thursday, 19 April 12
HANDY - 'POSITIVE TREND', PANAMAX - 'A FIRMER TENDENCY', CAPESIZE - 'AGAIN NEGATIVE'
Handy
The positive trend from last week continued, with more cargoes entering the market. Skaw/Passero del fixed tick above USD 4000 for US Gulf di ...
Thursday, 19 April 12
WILLIS MARINE MARKET REVIEW FORECASTS ANOTHER DIFFICULT YEAR - WILLIS GLOBAL MARINE / HELLENIC SHIPPING
After an inauspicious start, 2012 could well be "another difficult and uncertain year for the maritime industry faced with the aftermath of the ...
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- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
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- Africa Commodities Group - South Africa
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- McConnell Dowell - Australia
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- PowerSource Philippines DevCo
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- Bukit Baiduri Energy - Indonesia
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- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Australian Coal Association
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- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
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- India Bulls Power Limited - India
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- Economic Council, Georgia
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- White Energy Company Limited
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- Chettinad Cement Corporation Ltd - India
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- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
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- Planning Commission, India
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- Essar Steel Hazira Ltd - India
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- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
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- Price Waterhouse Coopers - Russia
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- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
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- Ministry of Transport, Egypt
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- Goldman Sachs - Singapore
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- Agrawal Coal Company - India
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- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
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- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
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- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
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- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
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- Indonesian Coal Mining Association
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- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
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- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
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- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
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- Ind-Barath Power Infra Limited - India
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- Cement Manufacturers Association - India
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- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
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