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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, 01 March 12
BUKIT ASAM TARGETS EUROPEAN INVESTORS
COALspot.com - PT. Bukit Asam (persero) Tbk, Indonesian state owned coal miner is planning to conduct road show in Europe next week to target at Eur ...
Thursday, 01 March 12
INDO-INDIA, LARGE ECO SUPRA CAN FETCH CLOSE TO USD 9K DOP N.CHINA - FEARNLEYS AS
Handy
The Atlantic Handysize market did not see any signs for recovery this week. It is still a major lack of spot cargoes and an oversupply of pro ...
Wednesday, 29 February 12
69 MINERS AGREE TO RENEGOTIATE CONTRACTS - THE JAKARTA POST
The Jakarta Post, one of the leading English news papaer in Indonesia reported that, as many as 60 coal contracts-of-work (PKP2B) and nine non-coal ...
Wednesday, 29 February 12
PUTTING COAL GASIFICATION TO WORK
Clifford Reese of the SSOE Group looks at practical solutions for district energy leaders who wish to implement clean coal technology.
Coal fuels ...
Monday, 27 February 12
COAL MINING PROFITS TOO HIGH, SAYS GOVT - TEMPO INTERACTIVE
Tempo Interactive reported that, Energy and Mineral Resources Deputy Minister of Indonesia Widjajono Partowidagdo has criticized coal-mining compani ...
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- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Central Electricity Authority - India
- MS Steel International - UAE
- CNBM International Corporation - China
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
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