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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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Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
Sunday, 15 January 12
THE FREIGHT MARKET CONTINUED TO BLEED - VISTAAR
COALspot.com - "The markets continued to bleed with BDI touching almost 1000 points , almost reaching the collapse of 2008 levels," said C ...
Saturday, 14 January 12
GOLDEN MINES TO SUPPLY 4 MIO TONS - INSIDER STORIES
Insider Stories reported that, Coal miner under Sinarmas Group PT Golden Energy Mines Tbk (GEMS), a subsidiary of PT Dian Swastatika Sentosa Tbk (DS ...
Friday, 13 January 12
DIFFICULT START OF 2012 FOR DRY BULK MARKET SEEN HARD TO CHANGE IN THE COURSE OF THE YEAR, UNLESS DEMOLITION PICKS UP
The dry bulk market has been on a freefall this week after a rocky start to the new year. Yesterday, the BDI (Baltic Dry Index) the industry's benc ...
Thursday, 12 January 12
DRY BULK MARKET CRASHING AT START OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept being on freefall mode yesterday, with the industry's benchmark, the BDI (Baltic Dry Index) losing a massive 5.17% on ...
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- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Economic Council, Georgia
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
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