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