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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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Tuesday, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
Sunday, 22 January 12
FREIGHT MARKET DROPPED TO THE LOWEST LEVEL SINCE 2008
COALspot.com - "The markets continued to soften almost reaching 2008 levels breaking the 1,000 point mark", said Capt. Reddy of Vistaar Sh ...
Saturday, 21 January 12
ASIAS PREMIER COMPREHENSIVE OPEN CUT MINING CONFERENCE SCHEDULED FOR FEBRUARY 2012
As the only such conference in the region for miners and service providers, IBC Asia’s Open Cut Mine Planning & Operational Excellence con ...
Saturday, 21 January 12
COAL MARKETS CELEBRATES A DECADE OF BRINGING BUYERS & SELLERS TOGETHER
In 2012, IBC Asia’s premier Coal Markets conference series – Asia’s only globally focused coal import, export and supply chain eve ...
Saturday, 21 January 12
SAMIN TAN COMPLETES BUMI PLC TAKEOVER - INSIDER STORIES
Insider Stories reported that, Indonesian coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN), that is controlled by stellar businessm ...
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- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Australian Coal Association
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
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