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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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Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
Sunday, 15 January 12
THE FREIGHT MARKET CONTINUED TO BLEED - VISTAAR
COALspot.com - "The markets continued to bleed with BDI touching almost 1000 points , almost reaching the collapse of 2008 levels," said C ...
Saturday, 14 January 12
GOLDEN MINES TO SUPPLY 4 MIO TONS - INSIDER STORIES
Insider Stories reported that, Coal miner under Sinarmas Group PT Golden Energy Mines Tbk (GEMS), a subsidiary of PT Dian Swastatika Sentosa Tbk (DS ...
Friday, 13 January 12
DIFFICULT START OF 2012 FOR DRY BULK MARKET SEEN HARD TO CHANGE IN THE COURSE OF THE YEAR, UNLESS DEMOLITION PICKS UP
The dry bulk market has been on a freefall this week after a rocky start to the new year. Yesterday, the BDI (Baltic Dry Index) the industry's benc ...
Thursday, 12 January 12
DRY BULK MARKET CRASHING AT START OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept being on freefall mode yesterday, with the industry's benchmark, the BDI (Baltic Dry Index) losing a massive 5.17% on ...
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- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
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- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Ceylon Electricity Board - Sri Lanka
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- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
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- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
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- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
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