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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, 18 November 11
MMTC SEEKS 1.365 MMT OF IMPORTED COAL
COALspot.com - India's MMTC, the largest trading company of India and a major trading company of Asia, has issued a term supply tender for 1.365Mt ...
Friday, 18 November 11
KPC, ARUTMIN OUTPUT REACHED 47.1 MIO TONS - INSIDER STORIES
PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, reported 47.1 million tons of coal production in 9M 2011, according to Indiser Stories.
Insi ...
Friday, 18 November 11
THE ATLANTIC SUPRAMAX MARKET EXPERIENCED A STEADY AND FIRM TENDENCY
Handy
The Atlantic Supramax market experienced a steady and firm tendency this week. Especially the North Atlantic and Mediterranean position ...
Friday, 18 November 11
BERAU COAL 9M PROFIT SOARS 194.46% - INSIDER STORIES
Insider Stories reported that, PT Berau Coal Energy Tbk (BRAU), which is 84.7% owned by Bumi Plc, reported a 194.46% jump in net profit by end of Se ...
Thursday, 17 November 11
DRY BULK MARKET INCHES FORWARD AND INTO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged higher yesterday, on the back of stronger demand for Capesize vessels and general improvement of sentiment on most of the ...
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- White Energy Company Limited
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Planning Commission, India
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
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