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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, 17 November 11
KOMIPO INVITES BIDS FOR 500K MT OF COAL
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids for the supply of 500,000 Metric Tons of minimum 5700 kcal/kg coal of NAR bases ...
Thursday, 17 November 11
INDONESIAN GOVERNMENT PLANS TO ISSUE MORATORIUM ON COAL MINING LICENSE
COALspot.com - Energy and mineral resources ministry is plans to issue a moratorium on the issuance of coal mining licenses, after the anti-graft co ...
Wednesday, 16 November 11
KRISHNAPATNAM PORT BECOMES DEEPEST DRAFT PORT IN INDIA
COALspot.com - Krishnapatnam Port in its quest to be the best port in India has increased its draft to 17.5 meters, according to E-Mail statement fr ...
Wednesday, 16 November 11
CHINA'S INDONESIA COAL IMPORTS RISE IN OCTOBER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31,162,688 MT of coal in October 2011.
China was a largest importer of Indonesi ...
Wednesday, 16 November 11
TAX OFFICE VOWS TO CRACK DOWN ON COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry’s Directorate General of Taxation says that it will strengthen its supervision of coal mi ...
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- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Minerals Council of Australia
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