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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, 28 November 11
CITING CONTRACTS, MINING FIRMS ARE NOT PAYING ROYALTIES UNDER LAW - THE JAKARTA POST
The Jakarta Post reported that, when the 2009 Law on Minerals and Coal was endorsed, hopes that Indonesia could maximize its revenue from the minera ...
Monday, 28 November 11
NEW ENVIRONMENTAL MARINE REGULATIONS TO IMPACT SHIPPING IN 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
August of next year will see some major changes for marine navigation. It’s when the North American ECA will come into force, introducing a 1% ...
Sunday, 27 November 11
INDIA'S KPCL TO IMPORT 50 MMT OF COAL FOR 10 YEARS
COALspot.com - Karnataka Power Corporation Limited (KPCL) will buy 5 million metric tonnes of coal annually for 10 years starting from 2015.
In a ...
Saturday, 26 November 11
INDIAN PORTS ARE BECOME COAL STOCKPILES..!!
COALspot.com - The Indian coal stocks and power tariff situation is the hot topic among the world coal producers as well as Indian coal importers.&n ...
Saturday, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
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- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Eastern Coal Council - USA
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Deloitte Consulting - India
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
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