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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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Tuesday, 13 September 11
CAPITAL COSTS OF INDIAN COAL MINING PROJECT - AN ANALYST VIEW
By Mr Dipesh Dipu, Director - Consulting (Mining), Deloitte Touche Tohmatsu India Private Limited
The coal mining sector that has been opened par ...
Tuesday, 13 September 11
INDONESIAS COAL SECTOR EYES 2012 BOOM - JG
The Jakarta Globe, Indonesian English language News paper reported that, Coal production is set to surge next year as coal miners bolster their busi ...
Tuesday, 13 September 11
DRY BULK RALLY MAINTAINS MOMENTUM AT START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum at the start of the week, as the industry’s benchmark, the Baltic Dry Index (BDI) was up by 2.07% ...
Monday, 12 September 11
INDONESIAN GOVERNMENT HAS ALLOCATED MORE COAL FOR 2012
COALspot.com - Indonesian government has increased the domestic market obligation allocation to 82.07 million tons of coal for 2012, which is 4 perc ...
Saturday, 10 September 11
THE FREIGHT MARKET LIKELY TO BE FIRM NEXT WEEK - CAPT. REDDY
COALspot.com - The freight market continued the upward trend during last week with BDI crossing 1,800 points and closing at 1,838 points up by 5.63 ...
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- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
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