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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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Thursday, 22 December 11
DRY BULK MARKET KEEPS LOSING TRACTION AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept retreating in the middle of the week, as charterers seem to be looking towards the holiday season and the start of the new ye ...
Tuesday, 20 December 11
THE COAL IMPORT INTO CHINA WAS QUIETER AS COAL STOCKS WERE AT HIGH LEVELS - BRS
The BDI ended the week at 1888 points (-1.8%), the BCI corrected to 3572 (-3.4%), the BPI was up at 1,775 (+3.6%), the BSI dropped to 1193 (-3.0%) a ...
Tuesday, 20 December 11
INDIA IMPORTS 66.41 PERCENT MORE COAL FROM INDONESIA LAST MONTH - SOURCES
COALspot.com: Indonesia, the world largest coal exporter, shipped 33.476* mln mt of coal in November, which is slightly higher than its Octobe ...
Monday, 19 December 11
KOPEX COMMITS ADDITIONAL ONE MILLION DOLLAR FOR PT TRANSCOAL MINERGY
COALspot.com - Mining contractor Kopex has agreed to extend a further US$1 million to finance the remainder of the expanded drill program at PT Tran ...
Monday, 19 December 11
PLN WILL NO LONGER BUY COAL FROM TRADERS
COALspot.com - Indonesia's state electricity company PT Perusahaan Listrik Negara will no longer allow traders to become their suppliers, said, its ...
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- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- The University of Queensland
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Australian Coal Association
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
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