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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, 01 December 11
DRY BULK MARKET RISES TO NEW HEIGHTS ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on rising this week, with the industry’s benchmark, the Baltic Dry Index (BDI) climbing to 1,846 points on Wednes ...
Tuesday, 29 November 11
SOUTH AFRICAN COAL INTO CHINA, THE ACTIVITY WAS SLOW - BRS
Capesize
The Capesize market in Atlantic stayed pretty firm last week with transatlantic rounds being fixed in the high twenties. Sentiment was les ...
Tuesday, 29 November 11
GOLDEN GATE BRIDGE OF INDONESIA COLLAPSED AT KUKAR, EAST KALIMANTAN
COALspot.com - A suspension bridge in Indonesia’s east Kalimantan province over the Mahakam river collapsed on Saturday, killing at least elev ...
Tuesday, 29 November 11
BUKIT ASAM SCOUTS RP3 TRILLION PROFIT - INSIDER STORIES
The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above ...
Tuesday, 29 November 11
DRY BULK MARKET BEGINS WEEK ON HIGHER NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Contrary to what had been the case during the past few weeks, this one began on a high note for the dry bulk market, with the Capesize sector pullin ...
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- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Economic Council, Georgia
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
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