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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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Wednesday, 01 February 12
2% OF IBPS TOTAL CONCESSION AREA CONTAINS TOTAL COAL RESOURCE OF 56.1 MILLION TON
COALspot.com - PT. Britmindo, a mine consulting firm, has finalized PT. Insani Bara Perkasa (IBP) first JORC (Joint Ore Reserves Committee) res ...
Tuesday, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
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- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Planning Commission, India
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
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