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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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Saturday, 12 November 11
DRY BULK MARKET REGAINS SOME OF THE LOST GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market managed to edge forward yesterday, putting an end and halting the losses accumulated over the course of the past weeks, which ha ...
Friday, 11 November 11
PETROCOM ENERGY PLANS $40M TO BUILD COAL PLANT IN CILEGON - JP
The Jakarta Post reported that, Hong Kong-based Petrocom Energy Ltd has unveiled plans to invest up to US$40 million on a proposed coal-blending fac ...
Friday, 11 November 11
GOVT WAITS LEGAL DECISION ON BUKIT ASAM, ADARO DISPUTE - JP
The Jakarta Post reported that, The government says that it will not interfere in the settlement process of the dispute between state coal miner PT ...
Thursday, 10 November 11
INDONESIAN REFERENCE COAL PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has set the November 2011 Indonesian Coal Reference Price for thermal coal at U ...
Tuesday, 08 November 11
COAL MINER ABM INVESTAMA PLANS $290M PUBLIC OFFERING - JG
The Jakarta Globe reported that, ABM Investama, an Indonesian coal miner controlled by the Hamami family, plans to raise as much as Rp 2.6 trillion ...
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- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- MS Steel International - UAE
- Planning Commission, India
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
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