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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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Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
Thursday, 26 January 12
ABM INVESTAMA SEALS US$100 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, PT Reswara Minergi Hartama, a subsidary of PT ABM Investama Tbk (ABMM), has sealed a 2 million tons of coal export co ...
Thursday, 26 January 12
DRY BULK MARKETS DOWNFALL KNOWS NO LIMITS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s demise seems to have no visible end, as China’s Lunar Year Holidays continue this week, thus leaving demand with n ...
Wednesday, 25 January 12
CLEAN AND CLEAR MINING PERMITS TO BE COMPLETED END OF 2012 - BISNIS.COM
Bisnis.com reported that, the government plans to announce 700 mining permits with "clean and clear" status without overlapping on other p ...
Tuesday, 24 January 12
ANOTHER SEVERE DROP IN THE CAPESIZE - BRS
The lunar year celebrations and the high number of new building deliveries (more than 35 Capes so far in January as owners push 2011 deliveries into ...
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- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
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