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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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Wednesday, 14 December 11
MINER TOBA BARA SEJAHTRA PLANS IPO IN 1ST HALF OF 2012 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Coal miner Toba Bara Sejahtra is aiming high next year, hoping to capitalize on renewed bullish sentiment in the lo ...
Wednesday, 14 December 11
TIMAH PLANS TO BOOST ITS COAL PRODUCTION TO TWO MILLION TONS PER ANNUM - SOURCES
COALspot.com - Timah plans to boost its coal production to two million tons per annum. The company also expects to acquire coal concession with mini ...
Wednesday, 14 December 11
BORNEO RESOURCE INVESTMENTS LTD. FINALIZES ACQUISITION OF INTEGRA PRIMA
COALspot.com - Borneo Resource Investments Ltd., announced that it has finalized the acquisition of an additional 1,300 hectare coal mining concessi ...
Tuesday, 13 December 11
BERAU COAL SCOUTS US$1.61 BIO SALES - INSIDER STORIES
Insider Stories reported that, coal mining company PT Berau Coal Energy Tbk (BRAU), that is 85% owned by London-listed company Bumi Plc, estimates a ...
Tuesday, 13 December 11
CAPESIZES AND PANAMAXES LEAD DRY BULK MARKET HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched closer to the 2,000 mark on Monday, with Panamaxes rebounding firmly and leading the gains. As a result, the industry&rsq ...
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- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- PTC India Limited - India
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
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