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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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Wednesday, 14 December 11
MINER TOBA BARA SEJAHTRA PLANS IPO IN 1ST HALF OF 2012 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Coal miner Toba Bara Sejahtra is aiming high next year, hoping to capitalize on renewed bullish sentiment in the lo ...
Wednesday, 14 December 11
TIMAH PLANS TO BOOST ITS COAL PRODUCTION TO TWO MILLION TONS PER ANNUM - SOURCES
COALspot.com - Timah plans to boost its coal production to two million tons per annum. The company also expects to acquire coal concession with mini ...
Wednesday, 14 December 11
BORNEO RESOURCE INVESTMENTS LTD. FINALIZES ACQUISITION OF INTEGRA PRIMA
COALspot.com - Borneo Resource Investments Ltd., announced that it has finalized the acquisition of an additional 1,300 hectare coal mining concessi ...
Tuesday, 13 December 11
BERAU COAL SCOUTS US$1.61 BIO SALES - INSIDER STORIES
Insider Stories reported that, coal mining company PT Berau Coal Energy Tbk (BRAU), that is 85% owned by London-listed company Bumi Plc, estimates a ...
Tuesday, 13 December 11
CAPESIZES AND PANAMAXES LEAD DRY BULK MARKET HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched closer to the 2,000 mark on Monday, with Panamaxes rebounding firmly and leading the gains. As a result, the industry&rsq ...
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- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Bhatia International Limited - India
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Mjunction Services Limited - India
- PTC India Limited - India
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
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