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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, 22 February 12
RAW COMMODITY EXPORT BAN SPARKS SMELTER BUILDING BOOM IN INDONESIA ANTARA / THE JAKARTA GLOBE
Antara / The Jakarta Globe reported that, as the government gears up to ban all exports of unprocessed commodities, Indonesia will see 12 new ...
Tuesday, 21 February 12
THREAT ISSUED ON MINERAL FIRMS AS GOVT PLANS EXPORT BAN - THE JAKARTA POST
The Jakarta Post, one of the leading english news papaer in Indonesia reported that, the government has given mineral producers three months to subm ...
Monday, 20 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU
The dry market experienced one more disappointing week with tonnage oversupply and limited cargo demand that pushes earnings for shipping players to ...
Monday, 20 February 12
JATENERGY SECURES FIRST 8000-TONNE COAL SALES CONTRACT FOR JONGKANG MINES
8000-tonne contract with Singaporean buyer signed for March delivery
50% down payment due in five working days
Production continues at both Jongka ...
Monday, 20 February 12
DIAN SWASTATIKA ACQUIRES ANDALAN LESTARI - INSIDER STORIES
Insider Stories reported that, PT Dian Swastatika Sentosa Tbk (DSSA), controlled by Fuganto Widjaja, son of Indra Widjaja, reported a 99.83% takeove ...
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- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Bhatia International Limited - India
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
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