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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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Friday, 25 November 11
DISPUTE BETWEEN GIANT MINING FIRMS ENDS IN LAHAT - THE JAKARTA POST
The Jakarta Post reported that, prolonged dispute taking place in the South Sumatra regency of Lahat and involving two giant mining companies PT Buk ...
Friday, 25 November 11
DRY BULK MARKET LOSING STEAM, FAST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s been a week of falls for the dry bulk market this one, leaving ship owners with a sour taste in their mouths, as evidence of a recovery i ...
Thursday, 24 November 11
INDONESIA/INDIA SPMX TC AROUND $ 7/8K AND AROUND $ 12/13.00 PMTS ON VOYAGE BASIS - FEARNLEYS
Handy
Last week ended on a positive note in the Atlantic however the activity levels are somewhat reduced. Owners are asking in excess of USD ...
Thursday, 24 November 11
DRY BULK MARKET KEEPS LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was lower once again on Wednesday, with the industry’s benchmark, the Baltic Dry Index (BDI) ending the session down by 1. ...
Tuesday, 22 November 11
NTPC TO BUY 2 MMT OF IMPORTED COAL FOR ITS FOUR PLANTS
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, the largest thermal power generati ...
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- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Minerals Council of Australia
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
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