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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, 15 February 12
HBA FOR FEB 2012, CLIMBS 2.09 PERCENT AND REACHED US$ 111.58 PER TON
COALspot.com - The Indonesian coal reference price for February climbs 2.09 percent to US$111.58 per ton after losing past three months. ...
Monday, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
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- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Planning Commission, India
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- White Energy Company Limited
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
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