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Dry Bulk Shipping Logistics - India

Dry Bulk - India

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Page 1: Dry Bulk - India

Dry Bulk Shipping Logistics - India

Page 2: Dry Bulk - India

Dry Bulk Shipping: An OverviewDry Bulk Shipping: An Overview

Driver of Growth: China and India

Indian Perspective

Challenges

Road Ahead

Page 3: Dry Bulk - India

Dry Bulk Shipping: An OverviewDry Bulk Shipping: An Overview

Page 4: Dry Bulk - India

Dry Bulk Shipping: An OverviewDry Bulk Shipping: An OverviewMarket CompositionMarket Composition

Page 5: Dry Bulk - India

Dry Bulk Shipping: An Overview

Driver of Growth: China and IndiaDriver of Growth: China and India

Indian Perspective

Challenges

Road Ahead

Page 6: Dry Bulk - India

Drivers of growth: ChinaDrivers of growth: China

The prime driver for the dry bulk shipping industry continues to be the sustained demand for commodities in China & also the increasing growth in India.

China’s infrastructure building program will continue to drive the demand for steel which in turn will stimulate the demand for Iron Ore and Coal

China’s increasing demand for steel will drive the dry bulk industry, at the same time the robust growth in Indian economy and scarcity of natural resources, India is also likely to continue with its demand for dry bulk commodities.

China’s steel production showing a growth of over 16% per annum & expected to continue this momentum will remain the driver of the market.

Page 7: Dry Bulk - India

Drivers of growth: IndiaDrivers of growth: India

India has emerged as the 3rd largest exporter of iron ore behind Brazil and Australia.

India stands among top 10 producers of steel in the World. It has emerged as the 5th largest producer of steel in the world and is poised to become the 2nd largest producer of crude steel by 2015-16.

Steel production by Indian Steel Makers was 65 mtpa in 2009-2010, according to the Ministry of Steel, Government of India. According to the ministry, the crude steel production capacity in the country by 2015-16 is expected to be nearly 124 mtpa.

Indian Steel production has grown at a compounded annual growth rate of 8.6 per cent during the period 2004-05 and 2008-09. Major part of the Steel production are sold in Domestic market.

Page 8: Dry Bulk - India

Dry Bulk Shipping: An Overview

Driver of Growth: China and India

Indian PerspectiveIndian Perspective

Challenges

Road Ahead

Page 9: Dry Bulk - India

Indian PerspectiveIndian Perspective

Year Crude steel production (in Mn. Mt)

Quantity Growth rate over last year (%)

2005-06 46.46 6.96

2006-07 50.81 9.38

2007-08 53.86 5.98

2008-09 58.44 8.50

2009-10* 64.88 11.02

Source: Joint Plant Committee Report (JPC) =Provisional

Growth of Steel production in India

Page 10: Dry Bulk - India

Indian PerspectiveIndian PerspectiveExpected requirement of raw materials and othersExpected requirement of raw materials and others

Input Materials UnitEstimated

consumption 2005-06

Estimated consumption in 2011-12

Additional requirement by 2011-

12

Coking coalMillion Tonne 31.5 46.0 14.5

Non-coking CoalMillion Tonne 15.0 24.5 9.5

Coal DustMillion Tonne Negligible 3.00 3.00

Injection        

Iron OreMillion Tonne 66.9 130 63.1

Scrap SteelMillion Tonne 10.2 18.0 7.8

Lime StoneMillion Tonne 11 19.5 8.5

DolomiteMillion Tonne 4.0 7.4 3.4

Natural Gas MCAL 10000 15000 5000

Ferro AlloysMillion Tonne 0.85 1.5 0.65

Power MW 4120 7700 3580

Page 11: Dry Bulk - India

Indian PerspectiveIndian PerspectiveSteel capacity in India- Present and FutureSteel capacity in India- Present and Future

(C rude s teel capacity in million tonne)

Inves tor E xis ting C apac ity B rownfield expans ion

2012

G reenfield 2012

Total c apac ity likely by

Dec ember 2012

S AIL 12.84 8.56 21.40R INL 2.90 3.40 6.30T ata S teel 6.80 3.20 3.00 * 13.00 *E ssar S teel 4.60 3.90 6.00* 14.50*J S W S teel 6.60 4.40 11.00J S P L 2.40 4.80 3.25 10.45Ispat Industries 3.60 0.60 4.20B hushan P ower & S teel 1.20 1.60 2.80B hushan S teel 0.80 2.20 3.00O thers & S econdary 31.00 3.20 34.20Total 72.74 35.86 12.25 120.87S ourc e: F inmin

Page 12: Dry Bulk - India

Indian PerspectiveIndian Perspective Sea Ports in IndiaSea Ports in India

Page 13: Dry Bulk - India

Indian Perspective Indian Perspective Focus of Ocean logisticsFocus of Ocean logistics

Prime focus is given by logistics industry on reduction of transportation costs. Infrastructure development programs taken up by the Government & private interests will contribute significantly for same.

Connectivity to the ports with rail and road networks are given priority for faster & easier movement from hinterland .

Efficiency of Indian ports are improved upon by continuous improvement of productivity, reducing the Port related charges and turnaround time with better governance. Modernization of Ports are given top priority & Private operators are being encouraged to develop new Ports & bring in Investment.

Warehousing facilities are modernized & open storage spaces are developed in all ports of India for cargo safety & speedy evacuation.

Page 14: Dry Bulk - India

Indian Perspective Indian Perspective Status of Ocean logisticsStatus of Ocean logistics India has 12 Major Ports, 200 nos. of Minor and Intermediate Ports

Minor ports market share increased from 9.9% in 1997 to 28.8% in 2007.

In all the ports iron ore loading is either through mechanical loading systems of conveyors, stack reclaimers & ship loaders and also manual loading process using shore cranes and ships gears and grabs.

More & more Indian Ports are getting equipped to handle bigger tonnages including Capesize vessels alongside by introduction of deeper draft berths.

Page 15: Dry Bulk - India

Indian PerspectiveIndian PerspectiveDevelopment of Ocean logisticsDevelopment of Ocean logistics

All round infrastructure development at all Indian ports with emphasis to reduce the turnaround time for ships are continuing. This will result in reduction of port congestion. Mechanization of Ports are also given priority for better productivity.

Reduction in handling costs will provide the much needed competitive advantage to Indian exporters vis-à-vis exporters from other countries.

India is poised to derive full benefit of geographical advantage through export markets by improving upon the infrastructure and reducing costs.

Page 16: Dry Bulk - India

Dry Bulk Shipping: An Overview

Driver of Growth: China and India

Indian Perspective

Challenges

Road Ahead

Page 17: Dry Bulk - India

Dry Bulk Shipping: An Overview

Driver of Growth: China and India

Indian Perspective

ChallengesChallenges

Road Ahead

Page 18: Dry Bulk - India

Challenges before Indian CharterersChallenges before Indian Charterers Volatility of the freight market driven by fluctuation of BDI.

Competition from China deployment ( From ECI, Vessels owners have option of deploying vessels in long duration China trade or short duration WCI trade).

Port Congestion – leading to low availability of vessels.

Poor performers – As we are compelled to pick up vessels from spot market, we at times have to try untested owners or vessels which occasionally turns out to be poor in performance.

Mid Stream discharge – As we discharge entire cargo from vessels to barges at Mumbai anchorage, for direct movement to our Jetty at Dharamtar, it throws huge challenge to manage the discharge operations.

Page 19: Dry Bulk - India

Dry Bulk Shipping: An Overview

Driver of Growth: China and India

Indian Perspective

Challenges

Road AheadRoad Ahead

Page 20: Dry Bulk - India

Road Ahead: Road Ahead: Expectations from MarketExpectations from Market

Young tonnage with good gear capacity & better performance.

Parity in freight /charter rates in spite of market volatility.

Timely availability of the vessels at Load port.

Owner’s co-operation to combat market challenges – understanding of partnership.

Transloaders at Mumbai anchorage for faster dispatch of vessels &

also to reduce the waiting due to port (anchorage) congestion.