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Monday, 09 January 12
2012: WHAT WILL IT BRING FOR THE DRY BULK MARKET? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 A further increase in dry bulk demand could be the remedy for most of the industry's oversupply issues, together of course with the high level of scrapping activity, as observed during the course of 2011. According to the latest BIMCO report on 2012, a large part of this increase in demand could come from India and its coal needs. The report said that "the year 2011 had barely started before a series of unforeseen events took place across the globe. Most of them affected dry bulk shipping negatively and the large Capesize vessels were particularly under pressure. Amongst the events were the flooding in Australia and South Africa, the triple disaster in Japan and the “Arab Spring” that also affected the supply of oil into Europe.
Half a year down the road, during which many Capesize vessels had earned less than any other dry bulk vessel size, the unexpected happened again. Strong demand for iron ore and coal from China and the recovering Japan, sourced from Brazil and Australia, ignited freight rates for Capesize vessels. A tight tonnage situation in the Atlantic basin combined with increased congestion in loading and discharging ports pushed average rates above USD 30,000 per day.
A far cry from the peaks of the super cycle, but surely an indication of the peak levels we have in sight for the near- to mid-term future as the supply side remains a considerable burden for the industry. The demand side is set to be relatively stable in 2012 although it’s likely to grow somewhat slower than in 2011 – at least in volume terms. Overall iron ore demand is likely to slow. Still, a lower world market price as compared to the domestic costs of mining it within China holds the key to provide positive demand shocks for this valuable steel ingredient. Growing demand for thermal coal from large Asian consumers is said to be a steady demand driver" said BIMCO.
In a separate research report on the outlook of the dry bulk industry, DVB Bank said that the current dry bulk fleet now stands at 8,877 vessels (585.1mio dwt). The average age of the fleet is about 12 years and 59.1% of the fleet is less than 10 years of age. In addition, the average age of vessels less than 10 years old is merely 2.8 years – a very young fleet. Similarly, the orderbook stands at 2,371 vessels (196.3mio dwt) which equates to 33.6% of the current fleet. In dwt terms, large Capes constitute the largest portion of the current fleet while Panamax size vessels have the largest Orderbook. ULBC size range is expanding substantially. So far, three of the 34 Vale ULBCs of 400K+ dwt have delivered.DVB Bank said in its analysis that if the remaining 31 vessels actually deliver, this will have a huge negative impact on all large Cape asset values as well as T/C rates and impact earnings of other Sub-Sectors as well.
Looking at deliveries, a total of 366 vessels of 28.3 million dwt are still headed towards delivery, according to figures up to November of 2011. These vessels represent 14.4% of the orderbook. Given that for the most part these weren't expected to be delivered within 2011, the researcher said that they will be rolled over to 2012. So, it draws the conclusion that "even Even with 40% delays due to slippage, postponement and cancellation, we are poised to cross the 100mio dwt mark this year. In 2012, some 1,431 vessels (121.6mio dwt) are scheduled for delivery, which is about 62% of the current orderbook" said DVB Bank.
In total the dry bulk cargo demand is forecast to rise to approximatly 3.7 billion tons this year. But, as DVB states, the level of the orderbook is too much for it to be absorbed without problems and downward pressure both on ship values and freight rates. "Although scrapping picked up in 2011 to 21.4mio dwt (334 vessels) as of November, this figure is merely 3.5% of the existing fleet" said DVB Bank. It concluded that the vessels which were ordered at the peak of the market back in 2007-2008 should add to distressed asset sales, as their owners won't be able to repay them without huge losses. In essence, the researcher said that the current slowdown will see many ship owners out of the market and bankrupt, due to cash flow problems, as at the moment, they don't have the necessary cash reserves to survive the downturn, like they did back in 2008.
BIMCO's advice towards dry bulk ship owners they should expect the unexpected, as has been the lesson learned. "Maybe even India will begin to influence the market as a significant importer. This would fulfil the prophecy and release a vast potential that has been simmering for a very long time and provide a much-needed second major demand driver. Supplementing China as the dominant factor in the market would create a more sustainable freight market going forward. However, this will not happen in just one year; moreover it appears destined to remain a long and dusty road for several years to come. An optimist would surely name India as the best thing that could happen to the dry bulk shipping industry. In the meantime volatile iron ore exports and strong demand for thermal coal is likely to characterise India’s contribution to the dry bulk markets" concluded the organization.
Source: Nikos Roussanoglou, Hellenic Shipping
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Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
Friday, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
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- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
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