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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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Monday, 20 February 12
COAL BOOM AND ENVIRONMENTAL CONCERN - SUNIL K KUMBHAT
COALspot.com - The dawn of the 21st century has seen a shift in the world's commercial balance of power, with the dominance of the US, Europe and J ...
Sunday, 19 February 12
THE SPOT FIXTURE RATES WERE REPORTED AT HIGH LEVELS - VISTAAR
COALspot.com - "The markets seems to holding back this week appears the momentum which picked up last week may slow down" - Capt. Reddy of ...
Sunday, 19 February 12
INDIKA ACQUIRES MULTI TAMBANGJAYA - INSIDER STORIES
Insider Stories reported that, PT Indika Energy Tbk (INDY) announced that wholly-owned subsidiaries have signed a conditional sale and purchase agre ...
Friday, 17 February 12
COLOMBIA COAL PRODUCTION, EXPORTS JUMP IN 2011: GOVT - COLOMBIA REPORTS
Colombia Reports reported that, colombia's coal production jumped 15.4% in 2011 to 85.8 million tonnes versus the previous year while exports rose ...
Thursday, 16 February 12
GEARING UP FOR THE EMERGING OIL & GAS OPPORTUNITIES IN MYANMAR
Press Release - Myanmar Ministry of Energy and Centre for Management Technology (CMT) to Co-host MOGP (Myanmar Oil, Gas & Power) Summit on 28 - ...
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- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- CNBM International Corporation - China
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Australian Coal Association
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
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