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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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Thursday, 22 December 11
DRY BULK MARKET KEEPS LOSING TRACTION AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept retreating in the middle of the week, as charterers seem to be looking towards the holiday season and the start of the new ye ...
Tuesday, 20 December 11
THE COAL IMPORT INTO CHINA WAS QUIETER AS COAL STOCKS WERE AT HIGH LEVELS - BRS
The BDI ended the week at 1888 points (-1.8%), the BCI corrected to 3572 (-3.4%), the BPI was up at 1,775 (+3.6%), the BSI dropped to 1193 (-3.0%) a ...
Tuesday, 20 December 11
INDIA IMPORTS 66.41 PERCENT MORE COAL FROM INDONESIA LAST MONTH - SOURCES
COALspot.com: Indonesia, the world largest coal exporter, shipped 33.476* mln mt of coal in November, which is slightly higher than its Octobe ...
Monday, 19 December 11
KOPEX COMMITS ADDITIONAL ONE MILLION DOLLAR FOR PT TRANSCOAL MINERGY
COALspot.com - Mining contractor Kopex has agreed to extend a further US$1 million to finance the remainder of the expanded drill program at PT Tran ...
Monday, 19 December 11
PLN WILL NO LONGER BUY COAL FROM TRADERS
COALspot.com - Indonesia's state electricity company PT Perusahaan Listrik Negara will no longer allow traders to become their suppliers, said, its ...
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- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- The University of Queensland
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
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