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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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Thursday, 19 January 12
SOUTHGOBI RESOURCES SELLS MORE THAN FOUR MILLION TONNES OF COAL IN 2011, 58% MORE THAN 2010
COALspot.com - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) has successfully complets year 2011 on guidance in terms of coal sales and production.
...
Thursday, 19 January 12
14TH VOGP MEETING IN HO CHI MINH CITY HANDS OUT LATEST UPDATES AND DEVELOPMENTS IN VIETNAM'S ENERGY INDUSTRY
Press Release: At upcoming 14th Vietnam Oil Gas Power on 27-28 Feb in Ho Chi Minh City the industry’s most influential names including Petrovi ...
Thursday, 19 January 12
DELTA DUNIA SEALS US$820 MIO CONTRACT INSIDER STORIES
Insider Stories reported that, PT Delta Dunia Makmur Tbk (DOID) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ( ...
Wednesday, 18 January 12
WARM WINTER ACROSS EUROPE HAS IMPACTED NEGATIVELY COAL DEMAND - BRS
With the Chinese New Year just a week away, all markets are slowing down. The drop in freight rates for all sizes has been significant over the past ...
Wednesday, 18 January 12
DRY BULK MARKET'S DRAMA CONTINUES IN START OF NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of newbuilding deliveries, coupled with a slow start to the new year, a typical trend for the dry bulk market, has led the industry's benc ...
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- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Planning Commission, India
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- The University of Queensland
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
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