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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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- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- PTC India Limited - India
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
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