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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, 27 December 11
MINERS MAKE CASE FOR RESUMING CONTRACT NEGOTIATIONS - THE JAKARTA POST
The Jakarta Post reported that, problems with the renegotiation of mining contracts in the country are far from over, as agreements on several cruci ...
Tuesday, 27 December 11
COAL SHIPMENT OF TIANJIN PORT REACHED 6.72 MLN TONNES IN NOVEMBER - STEEL HOME / HELLENIC SHIPPING
Tianjin port shipped 6.72 million tonnes of coal in November, decreasing 600,000 tonnes versus 7.32 million tonnes in October, while up 21.09% or 1. ...
Tuesday, 27 December 11
NEW CLAUSE PUBLISHED FOR SLOW STEAMING - BIMCO
Many owners and operators faced with high bunker prices are considering implementing slow steaming regimes to save fuel and to assist with capacity ...
Monday, 26 December 11
NEW EXPORT TAX PLAN GREETED WITH PRAISE AND CRITICISM - THE JAKARTA POST
The Jakarta Post, one of the Indonesia's leading english news paper reported that, both praise and criticism showered the government’s plan t ...
Sunday, 25 December 11
THERMAL COAL PRICES GAINED UP TO 4.32 PERCENT
COALspot.com - globalCOAL index gained 4.32 percent to US$106.36 per ton in RBCT, benchmark for South Asia and West Europe markets, for the week end ...
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- Commonwealth Bank - Australia
- Parliament of New Zealand
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- PTC India Limited - India
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Australian Coal Association
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
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