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