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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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Saturday, 17 September 11
GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE FOR US$ 1.26 BILLION
COALspot.com - GVK group, India’s leading infrastructure developer,confirmed arrangements for the acquisition of a strategic part of large, hi ...
Saturday, 17 September 11
INDIA'S GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE PROJECTS IN AUSTRALIA
COALspot.com - GVK group, India’s leading infrastructure developer, today confirmed arrangements for the acquisition of a strategic part of la ...
Friday, 16 September 11
DELTA DUNIA MAKMUR REMOVED 30.9 MILLION BCM OVERBURDEN IN AUGUST 2011
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 30.9 million bcm (+13.2% YoY) overburden in August 2011 while coal production was at 2.9 ...
Thursday, 15 September 11
RUSSIAN COAL EXPORTS UP 10.9% IN JAN-AUG TO 71.50 MILLION TONS - PORT NEWS / HELLENIC SHIPPING
Port News reported that, Coal exports from Russia in January-August 2011 grew by 10.9% compared with the same period last year, to 71.50 million ton ...
Thursday, 15 September 11
INDIAN GOVT PLANS TO DEVELOP 9 NEW MAJOR PORTS BY 2016 - INVEST MONEY / HELLENIC SHIPPING
The government has announced to make a investment of more than Rs 22,000 crore (approximately US$ 4,623,791,331) to develop nine new major ...
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- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Australian Coal Association
- White Energy Company Limited
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
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