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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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Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
Thursday, 26 January 12
ABM INVESTAMA SEALS US$100 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, PT Reswara Minergi Hartama, a subsidary of PT ABM Investama Tbk (ABMM), has sealed a 2 million tons of coal export co ...
Thursday, 26 January 12
DRY BULK MARKETS DOWNFALL KNOWS NO LIMITS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s demise seems to have no visible end, as China’s Lunar Year Holidays continue this week, thus leaving demand with n ...
Wednesday, 25 January 12
CLEAN AND CLEAR MINING PERMITS TO BE COMPLETED END OF 2012 - BISNIS.COM
Bisnis.com reported that, the government plans to announce 700 mining permits with "clean and clear" status without overlapping on other p ...
Tuesday, 24 January 12
ANOTHER SEVERE DROP IN THE CAPESIZE - BRS
The lunar year celebrations and the high number of new building deliveries (more than 35 Capes so far in January as owners push 2011 deliveries into ...
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- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Minerals Council of Australia
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- The University of Queensland
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- The Treasury - Australian Government
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- PTC India Limited - India
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
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