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