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Saturday, 03 November 12
DEMOLITION IS THE KEY FOR DRY BULK SHIPPING'S RECOVERY SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 With the number of new building deliveries so far in 2012 already having surpassed the total of 2011, it's more than clear that the dry bulk sector needs more than record demolition activity in order to compensate for the additional tonnage. In other words, older vessels will have to exit the world's fleet in a faster rate, otherwise they will end up competing with their newer counterparts for the same cargoes. According to a recent report from shipbroker Intermodal, more than 1,000 dry bulk carriers have already been delivered since the start of 2012, with over 85 million tons of deadweight capacity and there's two more months until the end of 2012.
According to Intermodal's Theodore Ntalakos, "demolition remains the only alternative for vintage tonnage especially for the bigger vessels. More than 25m tons dwt of dry tonnage have seen the way to the scrapyards, making 2012 another record year in demolition. If we look at demolition versus new deliveries, almost 400 dry bulk carriers have been scrapped representing around 40% of new deliveries. In terms of deadweight, since the new ships are always bigger, demolition is about 30% of the new building deliveries. Although the numbers are more favorable compared to 2011, in 2012 we have seen economies slowing down or even contracting which no doubt has affected global seaborne trade" he said.
We added that "looking at the ratio (demolition/new deliveries) x100 in terms of dwt and in each sub-sector of the dry fleet we can explain and highlight some findings:
Vessels up to 20,000dwt – Demolition is almost 74% of the tonnage or 93% in terms of dwt indicating that this is a sector where the fleet has remained stable.
+ Handysize – the ratio is 55% hinting both the small orderbook as well as the overaged fleet.
+ Handymax/Supramax – the ratio is 22%, showing the limited scraping compared to the very large Supramax orderbook. This number is up from 11% in 2011, which shows that despite the high utilization of this segment, the fleet needs to grow at a slower pace.
+ Panamax – the ratio is 33%, up from 24% in 2011. The lousy rates sent more ships for demo this year, 6.3m tons went for demolition and 19m tons dwt were delivered.
+ Capesize – another poor year for Capesizes explains the fact that scrapings represent almost 40% of new deliveries" he mentioned.
Concluding his argument, Mr. Ntalakos noted that "it feels like demolition activity this year was more of a necessity, not only because the market has remained depressed, but mainly because the future of the older vessels does not look that bright. No doubt the pressure of the orderbook remains enormous and will continue to strangle the market and when world demand subsides, the demolition alone cannot bring the rates back up. As we reach towards the end of 2012, more vessels are coming and surely more demo activity is expected".
Meanwhile, in terms of dry bulk supply, BIMCO noted in a mid-October report that "while our projections for the fleet growth in percentage have remained somewhat steady most of the year, the flows in and out have been much stronger than foreseen at the start of the year. The hectic delivery pace has surpassed the astonishing level of 10 million DWT a month several times, whilst demolition activity has breached the 3 million DWT a month level numerous times too".
The report also examined what can be deduced from this? "Probably that many shipyards are suffering under an intense lack of cash-flow. Whereas the payment structure of the contracts previously were mostly equally distributed or front-heavy from signing to delivery, the contracts that have been made more recently are likely to be back-end loaded, releasing the biggest chunk of the money to the yards closer to the completion and delivery of the ship. This could be one of many explanations that may eventually cause widespread bankruptcies amongst smaller and privately-held yards in the main shipbuilding nations. The active fleet has grown by 8.8% since the turn of the year, as 964 new ships have now been delivered into a fleet that already stood at 8,901 dry bulk carriers at the start of the year. Fortunately, the pressure of 80 million DWT of brand new capacity being poured into the market has been eased to some extent by 375 over aged vessels being demolished.
Ship owners continuously apply the demolition tool generously in order to improve the bad market conditions by cutting down on the supply side. Demolition activity in India, Bangladesh and Pakistan in particular is strong, with lots of dry bulk tonnage sold for breaking. Following the drop in demolition prices from the top in April prices have now moved sideways at a new lower level that has stuck around for some months now. 25 million DWT has now been demolished during 2012 with more to come, assuming that ship owners continue to be tempted by the recycling price level" it concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Monday, 15 October 12
IT'S STRICTLY COME CHARTERING - CLARKSON RESEARCH SERVICES
The charter market is a bit of a dance between ship owner and charterer: one leader, one follower; one step, two steps, turn... The dance is symbiot ...
Sunday, 14 October 12
SUB-BIT INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS: SOFT
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery lost 0.329 percent w- w but gained 0.248 percent d-d on Friday, 12 Oct ...
Sunday, 14 October 12
SUPRAMAX FREIGHT STEADY: PANAMAX FREIGHTS FIRM - VISTAAR
COALspot.com - The shipping market saw some hectic activity in the Cape and panamax sector and quite a lot of fixtures reported.
The BDI was up b ...
Friday, 12 October 12
HOW REAL IS THE THREAT OF PIRACY? - BIMCO
The threat of modern piracy remains serious, regardless of its seasonal variations and the fact that it is chiefly confined to the Indian Ocean, Gul ...
Friday, 12 October 12
INVESTMENT OPPORTUNITIES OCCUR IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although 2012 has by now evolved into one of the most challenging years for global shipping industry, ship owners are scouting the second hand ship ...
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- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Marubeni Corporation - India
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
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