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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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Thursday, 15 March 12
RESOURCE ALAM FY11 PROFIT UP 171% - INSIDER STORIES
Insider Stories reported that, coal mining company PT Resource Alam Indonesia Tbk (KKGI) reported a 171.16% jump in net profit last year on the back ...
Wednesday, 14 March 12
GLOBAL THERMAL TRADE FLOW CHANGES WILL ENSURE SECURITY OF THERMAL COAL SUPPLY, ALBEIT AT A HIGH PRICE - WOOD MACKENZIE
Wood Mackenzie Says Global Thermal Trade Flow Changes Will Ensure Security of Thermal Coal Supply, Albeit At a High Price Seaborne thermal demand by ...
Wednesday, 14 March 12
COKAL TAKES ANOTHER STEP IN DEVELOPING INFRASTRUCTURE TO FACILITATE METALLURGICAL COAL PRODUCTION
Global coal group, Cokal Limited (ASX-CKA), has signed Memorandums of Understanding (MoU’s) to develop two river ports and two small scale coa ...
Tuesday, 13 March 12
CLARIFICATION OF GR 24 OF 2012 REQUIRING DIVESTMENT OF FOREIGN OWNERSHIP OVER TIME
ASX Announcement
Global metallurgical coal group, Cokal Limited (ASX-CKA), is responding to the recent announcement of the Indonesian Ministry of ...
Tuesday, 13 March 12
EUROPEAN COAL CONTANGO: FURTHER STEEPNESS REQUIRED TO MAKE LARGE SCALE PHYSICAL TIME SPREAD ARBITRAGE MORE ATTRACTIVE - MISWIN MAHESH, BARCLAYS CAPITAL
COALspot.com - "With the contango between the Y+1 and M+1 ARA delivered contract now averaging above the $14/t level, there is an increasing in ...
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- Agrawal Coal Company - India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- The Treasury - Australian Government
- The University of Queensland
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
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