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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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Wednesday, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
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COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
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- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Minerals Council of Australia
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
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