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