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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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Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
Friday, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
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- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Australian Coal Association
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Planning Commission, India
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- VISA Power Limited - India
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- PTC India Limited - India
- McConnell Dowell - Australia
- The University of Queensland
- Thai Mozambique Logistica
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Parliament of New Zealand
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