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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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Tuesday, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
Sunday, 22 January 12
FREIGHT MARKET DROPPED TO THE LOWEST LEVEL SINCE 2008
COALspot.com - "The markets continued to soften almost reaching 2008 levels breaking the 1,000 point mark", said Capt. Reddy of Vistaar Sh ...
Saturday, 21 January 12
ASIAS PREMIER COMPREHENSIVE OPEN CUT MINING CONFERENCE SCHEDULED FOR FEBRUARY 2012
As the only such conference in the region for miners and service providers, IBC Asia’s Open Cut Mine Planning & Operational Excellence con ...
Saturday, 21 January 12
COAL MARKETS CELEBRATES A DECADE OF BRINGING BUYERS & SELLERS TOGETHER
In 2012, IBC Asia’s premier Coal Markets conference series – Asia’s only globally focused coal import, export and supply chain eve ...
Saturday, 21 January 12
SAMIN TAN COMPLETES BUMI PLC TAKEOVER - INSIDER STORIES
Insider Stories reported that, Indonesian coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN), that is controlled by stellar businessm ...
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- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Planning Commission, India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
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