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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, 11 April 12
TWO PERCENT OF IBP CONCESSION CONTAINS 42 MMT OF COAL
COALspot.com - 42.35 million ton of coal found in just 2% of PT Insani Bara Perkasa’s total concession area of 24,477 hectare.
Accord ...
Wednesday, 11 April 12
DRY BULK MARKET STILL SUBDUED, RECOVERY NOT YET SEEN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market entered the new week after the past days of easter holidays in western countries in a subdued mood. The industry’s benchma ...
Monday, 09 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first week of April ended with the Baltic Dry Index falling below 950 points, before Catholic Easter, and capesizes showing a modest upturn with ...
Sunday, 08 April 12
CHARTER RATES COULD CONTINUE TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI was almost at same levels closing slightly lower by 0.64 pct at 928 points.
The Cape index was up by 6.73 pct closing at ...
Friday, 06 April 12
INDONESIAN HBA FALL TO LOWEST LEVEL SINCE JANUARY 2011
COALspot.com - Indonesian HBA fall to lowest level since January 2011 this month. The monthly coal reference price for coal sales in April fal ...
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- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Australian Coal Association
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
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