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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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Sunday, 01 January 12
IS INDIA FOLLOWING INDONESIA TO STANDARDIZE COAL PRICES TO GET MAXIMUM BENEFITS?
COALspot.com - Coal India limited, an Indian state owned and world largest coal producer has introduced gross calorific value (GCV) based pricing me ...
Saturday, 31 December 11
GLOBALCOAL NEWC INDEX SURGED 2.32 PERCENT
COALspot.com - globalCOAL index in Newcastle Port, benchmark for Asian market, ended substantially higher, surged 2.32 percent to US$115.47 per ...
Saturday, 31 December 11
BORNEO LUMBUNG TO BUY BUMI STAKE, SWAP CEO - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading english news paper in Indonesia reported yesterday, shareholders of Indonesian coking coal miner Borneo Lumbun ...
Friday, 30 December 11
CENTRAL GOVERNMENT SHOULD ISSUE PERMITS - THE JAKARTA POST
The Jakarta Post reported that, business associations from both the palm oil and mining sectors have suggested that the central government should re ...
Thursday, 29 December 11
NEW VESSELS DELIVERED ARE FLOODING THE OCEANS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected 2011 has been the year that newbuilding deliveries peaked and kept "flooding" the market, thus supressing freight rates and er ...
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- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- VISA Power Limited - India
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- The University of Queensland
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Mercator Lines Limited - India
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
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