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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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Tuesday, 27 December 11
MINERS MAKE CASE FOR RESUMING CONTRACT NEGOTIATIONS - THE JAKARTA POST
The Jakarta Post reported that, problems with the renegotiation of mining contracts in the country are far from over, as agreements on several cruci ...
Tuesday, 27 December 11
COAL SHIPMENT OF TIANJIN PORT REACHED 6.72 MLN TONNES IN NOVEMBER - STEEL HOME / HELLENIC SHIPPING
Tianjin port shipped 6.72 million tonnes of coal in November, decreasing 600,000 tonnes versus 7.32 million tonnes in October, while up 21.09% or 1. ...
Tuesday, 27 December 11
NEW CLAUSE PUBLISHED FOR SLOW STEAMING - BIMCO
Many owners and operators faced with high bunker prices are considering implementing slow steaming regimes to save fuel and to assist with capacity ...
Monday, 26 December 11
NEW EXPORT TAX PLAN GREETED WITH PRAISE AND CRITICISM - THE JAKARTA POST
The Jakarta Post, one of the Indonesia's leading english news paper reported that, both praise and criticism showered the government’s plan t ...
Sunday, 25 December 11
THERMAL COAL PRICES GAINED UP TO 4.32 PERCENT
COALspot.com - globalCOAL index gained 4.32 percent to US$106.36 per ton in RBCT, benchmark for South Asia and West Europe markets, for the week end ...
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- Orica Mining Services - Indonesia
- Australian Coal Association
- Planning Commission, India
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- PTC India Limited - India
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Central Electricity Authority - India
- Posco Energy - South Korea
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Economic Council, Georgia
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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