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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
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Thursday, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
Wednesday, 26 August 20
ASIAN COAL PRICES LIKELY TO REMAIN DEPRESSED SAY TRADERS, ANALYSTS - REUTERS
Asian coal prices, which have fallen around 25% this year as power demand slumped due to the coronavirus outbreak, are unlikely to move higher befo ...
Wednesday, 26 August 20
WORLD COAL EXPORTS: INDONESIAN THERMAL COAL EXPORTS HAVE COME UNDER PRESSURE AS THERMAL COAL PRICES WEAKEN - REPORT
Indonesia’s exports to decline sharply from record highs
Indonesia is the world’s largest thermal coal exporter, sellin ...
Wednesday, 26 August 20
JAPAN'S COAL IMPORTS ARE BEING AFFECTED BY COMPETING INFLUENCES - REPORT
Japan is the world’s third largest thermal coal importer, importing an estimated 135 million tonnes of thermal coal in 2019. The country&rsqu ...
Wednesday, 26 August 20
PENDING SOUTH KOREA LEGISLATION COULD FORCE HALT TO COUNTRY’S COAL PLANT EXPORT DEALS - KOREA ECONOMIC DAILY
South Korea’s parliament looks set to pass new legislation to ban financing on foreign coal power projects, putting all overseas coal-fired p ...
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Showing 811 to 815 news of total 6871 |
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- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- White Energy Company Limited
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
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