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Saturday, 03 November 12
DEMOLITION IS THE KEY FOR DRY BULK SHIPPING'S RECOVERY SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 With the number of new building deliveries so far in 2012 already having surpassed the total of 2011, it's more than clear that the dry bulk sector needs more than record demolition activity in order to compensate for the additional tonnage. In other words, older vessels will have to exit the world's fleet in a faster rate, otherwise they will end up competing with their newer counterparts for the same cargoes. According to a recent report from shipbroker Intermodal, more than 1,000 dry bulk carriers have already been delivered since the start of 2012, with over 85 million tons of deadweight capacity and there's two more months until the end of 2012.
According to Intermodal's Theodore Ntalakos, "demolition remains the only alternative for vintage tonnage especially for the bigger vessels. More than 25m tons dwt of dry tonnage have seen the way to the scrapyards, making 2012 another record year in demolition. If we look at demolition versus new deliveries, almost 400 dry bulk carriers have been scrapped representing around 40% of new deliveries. In terms of deadweight, since the new ships are always bigger, demolition is about 30% of the new building deliveries. Although the numbers are more favorable compared to 2011, in 2012 we have seen economies slowing down or even contracting which no doubt has affected global seaborne trade" he said.
We added that "looking at the ratio (demolition/new deliveries) x100 in terms of dwt and in each sub-sector of the dry fleet we can explain and highlight some findings:
Vessels up to 20,000dwt – Demolition is almost 74% of the tonnage or 93% in terms of dwt indicating that this is a sector where the fleet has remained stable.
+ Handysize – the ratio is 55% hinting both the small orderbook as well as the overaged fleet.
+ Handymax/Supramax – the ratio is 22%, showing the limited scraping compared to the very large Supramax orderbook. This number is up from 11% in 2011, which shows that despite the high utilization of this segment, the fleet needs to grow at a slower pace.
+ Panamax – the ratio is 33%, up from 24% in 2011. The lousy rates sent more ships for demo this year, 6.3m tons went for demolition and 19m tons dwt were delivered.
+ Capesize – another poor year for Capesizes explains the fact that scrapings represent almost 40% of new deliveries" he mentioned.
Concluding his argument, Mr. Ntalakos noted that "it feels like demolition activity this year was more of a necessity, not only because the market has remained depressed, but mainly because the future of the older vessels does not look that bright. No doubt the pressure of the orderbook remains enormous and will continue to strangle the market and when world demand subsides, the demolition alone cannot bring the rates back up. As we reach towards the end of 2012, more vessels are coming and surely more demo activity is expected".
Meanwhile, in terms of dry bulk supply, BIMCO noted in a mid-October report that "while our projections for the fleet growth in percentage have remained somewhat steady most of the year, the flows in and out have been much stronger than foreseen at the start of the year. The hectic delivery pace has surpassed the astonishing level of 10 million DWT a month several times, whilst demolition activity has breached the 3 million DWT a month level numerous times too".
The report also examined what can be deduced from this? "Probably that many shipyards are suffering under an intense lack of cash-flow. Whereas the payment structure of the contracts previously were mostly equally distributed or front-heavy from signing to delivery, the contracts that have been made more recently are likely to be back-end loaded, releasing the biggest chunk of the money to the yards closer to the completion and delivery of the ship. This could be one of many explanations that may eventually cause widespread bankruptcies amongst smaller and privately-held yards in the main shipbuilding nations. The active fleet has grown by 8.8% since the turn of the year, as 964 new ships have now been delivered into a fleet that already stood at 8,901 dry bulk carriers at the start of the year. Fortunately, the pressure of 80 million DWT of brand new capacity being poured into the market has been eased to some extent by 375 over aged vessels being demolished.
Ship owners continuously apply the demolition tool generously in order to improve the bad market conditions by cutting down on the supply side. Demolition activity in India, Bangladesh and Pakistan in particular is strong, with lots of dry bulk tonnage sold for breaking. Following the drop in demolition prices from the top in April prices have now moved sideways at a new lower level that has stuck around for some months now. 25 million DWT has now been demolished during 2012 with more to come, assuming that ship owners continue to be tempted by the recycling price level" it concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Sunday, 09 December 12
LOW DEMAND PUSHES CHARTER RATES TOWARDS DOWN - VISTAAR
COALspot.com - The freight market has softened and BDI, The Baltic Dry Index, a measure of shipping costs for dry bulk goods, plunged below 10 ...
Friday, 07 December 12
A NEW PHASE FOR AUSTRALIAN RESOURCES - A FITCH STREET INTERVIEW
This week Matt Jamieson spoke with Andrew Colquhoun in Fitch's Asian sovereign rating team, and Vicky Melbourne, Fitch's commodity analyst based i ...
Friday, 07 December 12
SHIPPING INDUSTRY LOOKING ON YET ANOTHER TOUGH YEAR AS WE APPROACH 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With shipping finance "on the ropes" as traditional lenders appear to be cutting their losses and tonnage oversupply still the most import ...
Thursday, 06 December 12
PANAMAX : THE POSITIVE VIBES IN THE ATLANTIC REMAINS - FEARNLEYS AS
Handy
The Atlantic market is still depressed with dearth of cargoes and more ships. The trips from Continent to Feast fixed around USD 12k. Trips f ...
Thursday, 06 December 12
STRONG CHINESE DEMAND FOR DRY BULK COMMODITIES EXPECTED FOR 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A new analysis from BIMCO released yesterday suggests that 2013 is expected to be a stronger year in terms of China's "hunger" for commod ...
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- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- The University of Queensland
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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