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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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Saturday, 24 December 11
CHINAS LEVEL OF GROWTH TO DETERMINE COURSE OF DRY BULK MARKET IN 2012 SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest report, shipbroker Intermodal attempted to find a silver lining in the tough year that was 2011, as well as what one could expect from ...
Friday, 23 December 11
SPOT PACIFIC CAPESIZE VESSELS HAVE COMMANDED HIGH PREMIUMS - FEARNLEYS
Handy
Rates in the Atlantic kept stable from last week, with a touch of negativity closer to the end. Less spot cargoes seen, and owners are ...
Friday, 23 December 11
CONTENTIOUS ISSUES IN CONTRACT RENEGOTIATION - THE JAKARTA POST
The government has been renegotiating mining contracts, especially those 30-40 years old, with almost all mining companies, including PT Freeport In ...
Friday, 23 December 11
LANCO JOINS HANDS WITH BUKIT ASAM FOR INDONESIAN POWER PROJECT
COALspot.com - PT Tambang Batubara Bukit Asam, Indonesia's state owned coal miner and Indian based Lanco Infratech Ltd plans to build steam power p ...
Thursday, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
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- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
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