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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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Wednesday, 18 April 12
INDONESIA TO INTRODUCE EXPORT DUTY ON MINERAL ORES BY 6 MAY 2012
The Indonesian government is scheduled to issue regulation on export duty for minerals before May 6, 2012.
According to Bisnis Indonesia, as quot ...
Sunday, 15 April 12
THE SPOT FIXTURE RATES FOR SUPRAMAX IN SE ASIA SAW SOME SOFTENING OF CHARTER RATES - VISTAAR
COALspot.com - The market seem to be holding and except for Supramax and handy size index all other index was up with BDI up by 4.74 pct closing at ...
Friday, 13 April 12
MINERS OPPOSE GOVTS EXPORT TAX PLAN - THE JAKARTA POST
The Jakarta Post reported that, Indonesian mining companies have strongly protested the government’s plan to impose a 25 percent export tax on ...
Friday, 13 April 12
S&P CAUTIONS AGAINST NEW INDONESIAN MINING REGULATIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Investors may have expressed concerns about looming new mining regulations, but ratings agency Standard & Poor& ...
Thursday, 12 April 12
FIRST QUARTER OF 2012 SAW AN ADDITIONAL 24.2 MILLION DWT OF DRY BULK CARRIERS ENTERING THE FLEET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The inflow of newbuilt dry bulk vessels was larger than expected in the first quarter of 2012. As much as 24.2 million DWT were added to the fleet. ...
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- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Australian Coal Association
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
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