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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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Saturday, 24 December 11
CHINAS LEVEL OF GROWTH TO DETERMINE COURSE OF DRY BULK MARKET IN 2012 SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest report, shipbroker Intermodal attempted to find a silver lining in the tough year that was 2011, as well as what one could expect from ...
Friday, 23 December 11
SPOT PACIFIC CAPESIZE VESSELS HAVE COMMANDED HIGH PREMIUMS - FEARNLEYS
Handy
Rates in the Atlantic kept stable from last week, with a touch of negativity closer to the end. Less spot cargoes seen, and owners are ...
Friday, 23 December 11
CONTENTIOUS ISSUES IN CONTRACT RENEGOTIATION - THE JAKARTA POST
The government has been renegotiating mining contracts, especially those 30-40 years old, with almost all mining companies, including PT Freeport In ...
Friday, 23 December 11
LANCO JOINS HANDS WITH BUKIT ASAM FOR INDONESIAN POWER PROJECT
COALspot.com - PT Tambang Batubara Bukit Asam, Indonesia's state owned coal miner and Indian based Lanco Infratech Ltd plans to build steam power p ...
Thursday, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Economic Council, Georgia
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
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