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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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Wednesday, 04 January 12
NEWBUILDING ORDERS PICKED UP IN 2011, BUT 2012 EXPECTED TO BE A DIFFERENT STORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) starting the year on a sour note, losing 114 points and ending yesterday’s session, the first of the new year, ...
Wednesday, 04 January 12
MAHAGENCO TO IMPORT LOW MOISTURE COAL
COALspot.com - Maharashtra State Power Generation Co. Ltd. is the state power generation utility owned by Government of Maharashtra, intends to proc ...
Tuesday, 03 January 12
INDONESIA COAL REFERENCE PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the January 2012 coal reference price at US$ 109.29 per ton or US$ 3.3 ...
Tuesday, 03 January 12
WHICH WAY WILL THE DRY BULK MARKET HEAD ON FIRST WEEK OF THE YEAR? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Dry bulk ship owners will be wondering which way will the BDI (Baltic Dry Index), the industry’s benchmark, will head during the first days of ...
Monday, 02 January 12
THE PROMISE OF INDIA: A BRIEF INTERRUPTION? - CLARKSONS / HELLENIC SHIPPING
Future growth in Indian seaborne coal imports has sometimes been considered as one of the largest potential upsides in the currently oversupplied dr ...
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- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- White Energy Company Limited
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
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