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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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Monday, 12 December 11
DRY BULK MARKET LOOKING FOR BALANCE AS WE ENTER 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
During the past few months, freight rates for dry bulk carriers, especially Capesizes have increased significantly, providing ship owners with a muc ...
Sunday, 11 December 11
THE PANAMAX INDEX ENDED ON POSITIVE DIRECTION - VISTAAR
COALspot.com - The BDI and Cape index continued the upward trend this week also with BDI up by 3.00 pct closing at 1,922 points and Cape index up by ...
Saturday, 10 December 11
MAHAKAM RIVER RESUMES COAL TRANSPORTATION
COALspot.com - East Kalimantan local government has resumed limited coal barging through Mahakam River after two weeks of suspension following the c ...
Friday, 09 December 11
DRY BULK MARKET REBOUNDS ON HEALTHIER DEMAND OUTLOOK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged forward yesterday, at the highest rate of the past couple of weeks, as a result of stonger iron ore demand, backed by lowe ...
Thursday, 08 December 11
INDIA MAY SEE 41% ANNUAL GROWTH OF ITS COAL DEMAND DURING THE NEXT 5 YEARS - ICAP SHIPPING
India’s Ministry of Coal expects that India’s coal demand may face an annual 41% rise during the next 5 years, while its coal deficit is ...
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- Edison Trading Spa - Italy
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- Jaiprakash Power Ventures ltd
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- Central Electricity Authority - India
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- International Coal Ventures Pvt Ltd - India
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- Merrill Lynch Commodities Europe
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- Coal and Oil Company - UAE
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- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
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- Vedanta Resources Plc - India
- The Treasury - Australian Government
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- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
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- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
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- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
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- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
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- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
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- PTC India Limited - India
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- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
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- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
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- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Planning Commission, India
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- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- The University of Queensland
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
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