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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, 11 January 12
NEWBUILDING ORDERS DECLINE, AS SHIP OWNERS REALIZE OVERSUPPLY WILL "KILL" THEM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With 2012 now underway, it will be rather interesting to see how ship owners will play the "newbuilding ordering" card to their favor, as ...
Tuesday, 10 January 12
THE 4TH DEEPWATER ASIA CONGRESS 2012 WILL KICK OFF ON MAY 23 - 25
Press release - Based on the past three years’ success, SZ & W Group is excited to announce the 4th Deepwater Asia Congress will be held o ...
Sunday, 08 January 12
ICICI OUTLOOK ON INDIAN POWER, MINING,CEMENT, AND SHIPPING SECTORS PERFORMANCE IN 2012
Broking firm, ICICIdirect (India) has come out with report on sectors outlook for 2012. IRIS has collated key highlights for each sector from ...
Sunday, 08 January 12
SUPRAMAX DELIVERY SOUTH CHINA FOR TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7000 PER DAY - VISTAAR
Wish You a Very Happy and Prosperous New year 2012.
COALspot.com - The last report by us was on 16th Dec 2011 and because of holidays this would ...
Sunday, 08 January 12
THARPAK CONSORTIUM FORMED TO DEVELOP MEGA ENERGY COMPLEX IN SINDH PROVINCE, PAKISTAN
Press Release: On January 5th, TharPak, LLC met with officials of the Embassy of Pakistan in Washington DC to introduce and announce the formation o ...
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- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- ASAPP Information Group - India
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
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