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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, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
Thursday, 29 March 12
DRY BULK EDGED FURTHER UP, ON HEALTHY DEMAND FOR MOST SHIP TYPES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With capesize vessels finally reappearing in demand, the dry bulk market had an easier task of rising yesterday, as the BDI (Baltic Dry Index) reach ...
Thursday, 29 March 12
ADARO FY11 NET INCOME JUMPS 124% - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) today announced a 124% jump in net income to US$552 million last year or US$0.017 a share. ...
Wednesday, 28 March 12
CUESTA HAS RECEIVED APPLICATIONS AND FIRM BIDS IN EXCESS OF $9 MILLION FOR THE COMPANYS IPO
COALspot.com - The Directors of Cuesta Coal Limited (ASX:CQC) have announced that today it has received applications and firm bids in excess of $9 m ...
Wednesday, 28 March 12
ORPHEUS ENERGY TO COMMENCE JORC DRILLING AT ADK PROJECT
COALspot.com - Indonesian coal explorer and producer, Orpheus Energy (ASX:OEG), have today announced that the company is about to commence a drillin ...
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- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- The University of Queensland
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- White Energy Company Limited
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
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