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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, 05 December 11
SGX LAUNCHED IHS MCCLOSKEY/XINHUA INFOLINK OTC CFR SOUTH CHINA COAL CONTRACT TODAY
COALspot.com - In order to meet the demand of the coal industry for an effective coal hedging tool with counterparty credit risk mitigation facility ...
Monday, 05 December 11
DRY BULK RATES LOOKING TO EXTEND GAINS THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize dry bulk carrier owners have had a great week, with rates rising for six straight sessions (including the end of the week before that). As ...
Sunday, 04 December 11
SUPRAMAX TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7500 - 8000 PD
COALspot.com - The BDI and Cape index recovered this week. The BDI was up by 3.26 pct and Cape index saw a big jump and closed at 3409 points (up by ...
Saturday, 03 December 11
BORNEO TO SPEND US$600 MIO CAPEX - INSIDER STORIES
Insider Stories reported that, Coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN) plans to spend US$600 million capital expenditure ( ...
Friday, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
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- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
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