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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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Tuesday, 22 November 11
ABM INVESTAMA SETS IPO AT RP 3,750
Insider Stories reported that, Integrated energy company PT ABM Investama Tbk has determined the IPO price at Rp3,750 (approximately US$ 0.415) per ...
Tuesday, 22 November 11
A SURPRISINGLY STRONG WEEK FOR THE CAPES - BRS
Positive gains for most of the segments this week, the exception being the Handysizes. Overall the BDI ended the week at 1,895 points (+3.3% week-on ...
Tuesday, 22 November 11
APPETITE FOR DRY BULK VESSELS SLOWS DOWN AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was down at the beginning of the week, as demand for Capesize vessels was particularly low. The industry’s benchmark, the ...
Monday, 21 November 11
CAPESIZES DRIVE MARKET LOWER, ANALYSTS DIVIDED ON DRY BULK OUTLOOK IN THE LONG RUN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market ended the week on a sour note, with the industry’s benchmark heading downwards to 1,895 points, which represented a slight ...
Sunday, 20 November 11
THE FREIGHT MARKETS EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The market continued to move up with all sectors gaining except for handy size.
The BDI was up by 3.26 pct and closed at 1895 poin ...
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- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Australian Coal Association
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Planning Commission, India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Central Electricity Authority - India
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