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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, 01 February 12
2% OF IBPS TOTAL CONCESSION AREA CONTAINS TOTAL COAL RESOURCE OF 56.1 MILLION TON
COALspot.com - PT. Britmindo, a mine consulting firm, has finalized PT. Insani Bara Perkasa (IBP) first JORC (Joint Ore Reserves Committee) res ...
Tuesday, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Planning Commission, India
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- White Energy Company Limited
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Dalmia Cement Bharat India
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