We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 23 September 11
RECORD RECYCLING ACTIVITY STIRS OPTIMISM IN DRY BULK SAYS BIMCOS ANALYSIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 As expected at the start of the year, dry bulk ship owners were expected to flock scrapyards around the world, in order to take advantage of attractive scrap prices and help alleviate tonnage oversupply pressures, already in place since the last months of 2010. With 2011 also looking to be another record-breaking year in terms of new building deliveries, scrapping of older vessels was crucial to the industry’s recovery. Well, after nine months, it seems that these efforts have paid off, with the dry bulk market staging a superb comeback since late summer.
According to BIMCO’s latest analysis, in absolute numbers, 2011 is expected to become the new no1 in terms of dry bulk tonnage leaving the fleet to be recycled. “On On course for more than 20 million DWT to be demolished, with the potential of reaching 25 million if owners continue to be attracted by the relatively high demolition rates and freight rates fail to improve significantly through the remainder of the year.
Chief Shipping analyst at BIMCO, Peter Sand says: “The huge amount of tonnage leaving the fleet for recycling is very positive news for the dry bulk market. As 2011 is going to provide the largest inflow of new ships ever, this counterbalancing effort by ship owners is softening the current imbalance between supply and demand as fleet growth will be tempered”.
The previous demolition record was set in 1986 when 12.9 million DWT was demo-lished. At that time the dry bulk fleet was comprised of just 197.2 million DWT, bringing the annual demolition rate to 6.5%. Should 2011 bring around the same annual demolition rate relatively, 35 million DWT would have to be recycled.
The primary driver behind this development is the fact that earnings have been close to OPEX-levels for most of the year. Combined with a strong inflow of new tonnage this has led to a strong surge in demolitions of older tonnage” said Mr. Sand.
BIMCO’s analysis continues: “The fleet growth rate in the Capesize segment has so far been tempered by 4.4% due to demolition, with the potential of reaching as much as 6.6% for the full year. This offsets the fleet growth to a large extent, since the absence of any demolition activity during 2011 would have resulted in the Capesize fleet growing by astonishing 20%. Massive as this figure may sound, the Capesize fleet grew by 23% last year and 18.5% in 2009. If the full potential of demolition of the Capesize fleet in 2011 should materialize, that would equal another 4.6 million DWT to be demolished. In order words it would require the 28 remaining Capesize vessels that are built in 1985 or before to exit the fleet.
The demolition activity has primarily involved Capesize vessels. 55% of the recycled DWT in 2011 represented Capesize vessels. This compares to the previous 10 years average at just 27% of total dry bulk demolition. As the Capesize segment has already seen inflow of new tonnage in excess of 27 million DWT (153 vessels), the decision to take a vessel out of the commercial service is helping to cushion the impact from significant oversupply which has already left deep scars in terms of very poor earnings. Average spot earnings for a 10 years old Capesize vessel in 2011 have been just USD 8,296 per day. This is the poorest result on record. Last year such a vessel earned USD 30,587 per day on average.
This means that, if you have so far traded your Capesize vessel exclusively in the spot market during 2011, earnings would have covered only daily running costs, regardless of the composition of your Capesize fleet (new/old, debt-free/indebted). This may be one of the most important factors behind the booming demolition activity as massive inflow of new tonnage doesn’t encourage higher demolition activity alone.
Daily running cost on a Capesize vessel today is around USD 8,000 per day excluding capital costs and depreciations. If you include the above mentioned costs in the earnings-equation the picture looks quite different and it really spells out the chal-lenges facing owners. If your new built and externally financed Capesize is bought at top dollar at the peak of the market (USD 95 million) using 80% debt at 5% p.a. you will need just above USD 30,000 per day to break-even with the vessel on a stand-alone basis. At the other end of the scale the same calculation equals a break-even rate at USD 19,000 per day if you invest in a 5 year old second hand vessel today at USD 39 million.
Owners of “V Europe” have just sold the vessel for USD 10 million to be demolished at a Bangladeshi facility. The vessel that was beached on August 30 is amongst the latest in a very steady stream of dry bulkers to be withdrawn from service. The 1982-built, 139,496 DWT vessel is the 58th in the line of Capesize bulk carriers, under-scoring the strong flow of vessels satisfying a very solid demand for scrap metal in the demolition country.
The healthy demand for scrap steel is visible from the high ldt-prices offered. “V Europe” went to the breakers for USD 525 per ldt (Light Displacement Tonnage), building further on the continual rise in prices offered by cash buyers.
There are four major ship recycling markets, namely India, Bangladesh, China and Pakistan. In all terms India is by far the largest ship breaking nation and Alang the leading facility. So far this year, 283 vessels with a cargo capacity of 8.9 million DWT have been scrapped by Indian breakers. Bangladesh comes in second in terms of DWT - 7.4 million and China in terms of numbers – 107 vessels of various kinds. The typical demolished Capesize vessel is 27 years old on average with a cargo capacity of 160,125 DWT and built in Japan (51%) between 1977 and 1991” concluded BIMCO.
“At the current demolition pace, 4.7% of the dry bulk fleet will be demolished during 2011. But as the order book still holds 235 million DWT in prospect for future delivery equal to 40% of current active fleet, – recycling of over-aged tonnage must remain at high volume to bring optimism back and steer this dry bulk segment towards more sustainable freight levels and thus better earnings“, adds Peter Sand.
Sorce: Nikos Roussanoglou, Hellenic Shipping
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 02 September 20
MARKET INSIGHT - INTERMODAL
The imminent global shift towards eco-friendliness has caused divide among the shipping community because there is no outlined, clear-cut way via w ...
Wednesday, 02 September 20
INDONESIA COAL PRICE REFERENCE DIVES FURTHER IN SEPTEMBER DUE TO SUBDUED DEMAND & GLOBAL OVERSUPPLY
Subdued demand & global oversupply pushed down this month's HBA
COALspot.com: The Indonesia Coal Price Reference ...
Tuesday, 01 September 20
WHY INDIA CAN'T MATCH THE GULF REGION'S RECORD-LOW SOLAR TARIFFS - IEEFA
5-10% annual decline in tariffs estimated for the next decade
A number of countries in the Gulf region have set record-low prices for solar in ...
Tuesday, 01 September 20
COVID-19 PUSHES US LNG INTO A TIGHT SPOT - DREWRY
The pandemic-led weak projections for economic growth will derail US LNG exports in full-year 2020 with the country also losing ground in the long ...
Monday, 31 August 20
DEFECTIVE PASSAGE PLANNING: UNSEAWORTHINESS OR A NAVIGATIONAL DECISION? THE CMA CGM LIBRA QUESTION SAILS ON TO THE UK SUPREME COURT - GARD
KNOWLEDGE TO ELEVATE
The UK Supreme Court has granted leave to appeal the recent decision in Alize 1954 v Allianz Elementar Versicherungs AG ( ...
|
|
|
Showing 801 to 805 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
|
| |
| |
|
