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Monday, 30 July 12
DRY BULK MARKET TO REMAIN UNDER PRESSURE FOR THE REST OF 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 In an interview with Hellenic Shipping News Worldwide, Mr. Yannis Pachoulis, President of the Hellenic Shipbrokers' Association, remains cautiously optimistic regarding the dry bulk market's long-term prospects. He states that the current downturn was expected, as more and more newbuilding vessels were scheduled to hit the water, on the back of a huge orderbook. He adds that with global dry bulk trade expected to increase exponentially during the next few years, the current oversupply of dry bulk tonnage will be gradually absorbed, thus helping to bring freight rates back to more sustainable levels.
Since the start of the year, we've witnessed a dry bulk market collapse. Why has this occurred? Was the fall expected or did its extent take some under surprise?
Well we cannot name it a ‘collapse’. It is indeed a free fall, but bearing in mind the world’s economy situation together with the oversupply of tonnage due to mass deliveries of newbuildings, ordered during the last five years, brought the tough times of shipping industry we are experiencing now. The fall was expected as the supply of tonnage increased dramatically and broke the balance of supply and demand. I am sure that the prudent owners and brokers have predicted this fall and in most cases were prepared for it.
Is China in a position to be the dry bulk market's powerhouse, like it has been in the past years?
For the last decade China proved to be the dry bulk market’s powerhouse. As the Chinese Government’s 20 years development plan is running , raw materials will be needed, so it will still remain the master powerhouse not only for shipping but for trading also. We have to keep in mind that although the imports of iron ore, which is the primary raw material, might decrease, the imported iron ore is going to be well above half a billion tons. China’s total output in iron ore is estimated to be around 1.5 billion tons this year against 1.33 billion tons in 2011 out of which 686 million tons were imported. It is therefore obvious that China will remain the great source of seaborne trade.
How do you see the market behaving in months until the end of the year? Is a rebound to healthier levels imminent or will ship owners have to be patient and weather the storm?
It’s a good question. Personally, I don’t see great changes till the end of the year – which in my opinion is healthy – of course we are expecting an increase in 4th quarter as it is common in shipping, but nothing extraordinary. The fluctuations of the market will continue and the usual geographical gaps will remain. Shipping as a globalized industry has to be patient, following the international trade market which is showing some optimistic signs, for example the growth of the world trade predicted to reach close to 100 % next 15 years with specific areas like S.America, India, Australia, China, Mexico, African and South East Asian countries expected to play a prime role in future. In the meantime India’s coal imports have already increased during the last three years and expected to have a further increase of approximately 35-36 % in the years to come.
What about demolition activity? Is scrapping activity enough to compensate for part of the newbuilding deliveries?
Demolition is definitely a way to assist the balance of supply and demand. We have already seen a great increase in scrapping activity the last three years. It is obvious that a weak market is leading most of the overaged tonnage to the scrapyards. During 2010 the total dwt scrapped was 28 million tons, 2011 was 42 million tons and the number is growing by nearly 50% during 2012. Scrap prices are still high and owners should take advantage of the prevailing needs and prices and lead their old tonnage to demolition yards, thus giving a chance to their younger tonnage to survive. The average age of scrapped tonnage jumped from 30.5 years in 2010 to 28 years today for dry cargo vessels and 22 years for tankers.
In terms of demand, could other countries like India come to the help of dry bulk ship owners?
As explained hereabove, India’s coal imports are likely to increase from 137 to 185 million tons. Having a target growth rate of 7.5 per cent per year, India seems to be one of the leading countries worldwide in terms of industrial and agricultural infrastructure. And it's not the only one. There are other economies which are giving signs of emerging growth. Russian economy with the known resources, Brazil with the sugar and iron ore trade, Argentina with the grain production, USA and Canada with their industrial and grains products, Australia with the iron ore and coal exports. It’s a promising lot, therefore we should be optimistic for the future of shipping.
Do you expect shipping companies to come under further pressure from banks and lenders in general, with some of them even exiting the market all together?
It all depends on the policy of the banks. There is indeed a pressure, especially to shipowners which purchased their fleet during the very high market of 2006-2008, when the values were sky high. We have recently seen banking and financing organizations to resign from their shipping activities for various reasons, like Commerzbank – being a key player in shipping finance-which decided to exit shipping . But in the meantime we have also experienced refinancing facilities from banks which were not heavily involved in the industry. Hopefully we are not going to see unfortunate events i.e. shipping companies exiting the shipping market due to financial problems created by banks.
Do you believe that the latest fuel regulations regarding ship emissions will ultimately lead to "greener" vessels? Are ship owners looking to build more efficient vessels, or will their preferred solution be to install new engine technologies onboard existing vessels in order to comply with low-sulphur fuel regulations?
Definitely the new fuel regulations are already leading shipowners in building ‘greener’ vessels. Most of the major shipyards have already created new designs of eco-type vessels which will be the leading force in future. Apparently the shipyards following the high bunker prices and the new regulations are trying to create environment friendly vessels with low consumption using, at least in the areas where imposed, the low-sulphur bunkers.
On the other hand the already existing fleet will have to harmonize with the new regulations so the owners have to make all necessary arrangements in order to comply with them, otherwise they are going to face ‘prohibited areas’ in the trade of their ships.
How has the eurozone debt crisis and more importantly the Hellenic financial woes affected your day-to-day business?
We are living in Greece and as Greeks, we are facing the problem of this crisis. It is definitely affecting our life but in the meantime strengthens our will to assist in any possible way our country to overcome this difficulty. Eurozone’s economical situation cannot be considered as smooth. There are different economical levels of the member countries and we have to reach an accepted balance. This is not easy but I strongly believe it can be achieved, provided that there will be understanding from all parties concerned. Our day-to-day business is running normally for the time being but definitely affected, having to live in an uncertain economical environment, but again we are optimistic.
Source: Nikos Roussanoglou, Hellenic Shipping
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Saturday, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, alth ...
Tuesday, 12 June 12
ITACHA RESOURCES BUYS SARANA MARINE - INSIDER STORIES
Insider Stories reported that, coal mining company PT Itacha Resources, a joint venture between Anthoni Salim and Glenn Yusuf, announced that Itacha ...
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- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- PTC India Limited - India
- Australian Coal Association
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
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