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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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Sunday, 18 March 12
BUKIT ASAM'S NET PROFIT IN 2011 ROSE 54% TO US$ 339.56 MILLION
COALspot.com - Company revenue for the period January - December 2011 amounting to Rp 10.6 trillion (approximately US$ 1,164,835,164.84) recorded an ...
Saturday, 17 March 12
THE FREIGHT RATES FOR INDONESIA TO INDIA REMAINED FIRM - VISTAAR SINGAPORE
COALspot.com - The market continued to be firm and all segments were up except for Cape Index which was down by 2.46 pct closing at 1,466 points.
...
Saturday, 17 March 12
INDIAN GOVT FINALIZES DRAFT BILL FOR COAL REGULATOR - PTI
The coal sector would soon get a regulator as the government has finalised a draft bill for the purpose, Coal Minister Sriprakash Jaiswal said Wedne ...
Friday, 16 March 12
THE PACIFIC MARKET IS FIRMING UP - FEARNLEYS AS
Handy
A slightly positive trend was seen last week in the Atlantic. Skaw-Passero deliveries fixed around USD 3k to US Gulf, while US Gulf deliveres ...
Thursday, 15 March 12
RAINS AVERAGE SELLING PRICE OF COAL WENT UP BY 22 % IN 2011
COALspot.com - PT. Resource Alam Indonesia Tbk, an Indonesian CCoW (3rd Generation) holder reported Wednesday a 171 percent increase in net profits ...
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- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Planning Commission, India
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
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