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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, 17 December 11
THE FREIGHT MARKET SEEMS TO HAVE ALMOST BOTTOMED OUT AND MAY REMAIN STEADY AT THESE LEVELS CAPT REDDY
COALspot.com - The BDI and Cape index closed lower this week with BDI closing at 1,888 points (down by 1.76 pct) and Cape index at 3,572 points (dow ...
Friday, 16 December 11
DRY BULK MARKET LOSES TRACK ON CAPESIZE LOSSES, SHIP FINANCING REMAINS TROUBLESOME - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn’t manage to sustain earlier gains, losing track yesterday, on reduced Capesize demand and persisting troubles in smal ...
Thursday, 15 December 11
BERAU SEES INDIA AS POTENTIAL MARKET FOR LOW-CALORIE COAL - THE JAKARTA POST
The Jakarta Post reported that, Publicly listed coal mining company PT Berau Coal Energy (BRAU), the fifth largest coal producer in Indonesia, sees ...
Thursday, 15 December 11
PANAMAX HARDLY AFFECTED BY THE RECENT FIRMER TENDENCY FOR THE BIG SISTERS - FEARNBULK
Handy
The rates are more or less the same as last week. Continent/US Gulf fixing at tick below USD 10k and Gulf/Continent levels at USD 25k. Trips ...
Thursday, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest research note, BIMCO said that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply w ...
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- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- The University of Queensland
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Bhatia International Limited - India
- MS Steel International - UAE
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Australian Coal Association
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
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