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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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Sunday, 01 January 12
IS INDIA FOLLOWING INDONESIA TO STANDARDIZE COAL PRICES TO GET MAXIMUM BENEFITS?
COALspot.com - Coal India limited, an Indian state owned and world largest coal producer has introduced gross calorific value (GCV) based pricing me ...
Saturday, 31 December 11
GLOBALCOAL NEWC INDEX SURGED 2.32 PERCENT
COALspot.com - globalCOAL index in Newcastle Port, benchmark for Asian market, ended substantially higher, surged 2.32 percent to US$115.47 per ...
Saturday, 31 December 11
BORNEO LUMBUNG TO BUY BUMI STAKE, SWAP CEO - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading english news paper in Indonesia reported yesterday, shareholders of Indonesian coking coal miner Borneo Lumbun ...
Friday, 30 December 11
CENTRAL GOVERNMENT SHOULD ISSUE PERMITS - THE JAKARTA POST
The Jakarta Post reported that, business associations from both the palm oil and mining sectors have suggested that the central government should re ...
Thursday, 29 December 11
NEW VESSELS DELIVERED ARE FLOODING THE OCEANS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected 2011 has been the year that newbuilding deliveries peaked and kept "flooding" the market, thus supressing freight rates and er ...
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- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Aditya Birla Group - India
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
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