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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, 17 December 11
THE FREIGHT MARKET SEEMS TO HAVE ALMOST BOTTOMED OUT AND MAY REMAIN STEADY AT THESE LEVELS CAPT REDDY
COALspot.com - The BDI and Cape index closed lower this week with BDI closing at 1,888 points (down by 1.76 pct) and Cape index at 3,572 points (dow ...
Friday, 16 December 11
DRY BULK MARKET LOSES TRACK ON CAPESIZE LOSSES, SHIP FINANCING REMAINS TROUBLESOME - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn’t manage to sustain earlier gains, losing track yesterday, on reduced Capesize demand and persisting troubles in smal ...
Thursday, 15 December 11
BERAU SEES INDIA AS POTENTIAL MARKET FOR LOW-CALORIE COAL - THE JAKARTA POST
The Jakarta Post reported that, Publicly listed coal mining company PT Berau Coal Energy (BRAU), the fifth largest coal producer in Indonesia, sees ...
Thursday, 15 December 11
PANAMAX HARDLY AFFECTED BY THE RECENT FIRMER TENDENCY FOR THE BIG SISTERS - FEARNBULK
Handy
The rates are more or less the same as last week. Continent/US Gulf fixing at tick below USD 10k and Gulf/Continent levels at USD 25k. Trips ...
Thursday, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest research note, BIMCO said that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply w ...
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- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- The University of Queensland
- SMC Global Power, Philippines
- Planning Commission, India
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
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