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Saturday, 17 April 10
DRY BULK SHIPPING MARKET ANALYSIS - BIMCO
 Strong Chinese steel market is set to cushion the flood of new Capesize vessels entering the dry bulk fleet Demand: The first quarter of 2010 saw ups and down for the BDI with the index hovering around 3,000. It seems as if the market is balanced on a knife edge. High supply is likely to overmatch even very healthy demand growth rates – strongly dependant on China.
Chinese iron ore imports continue to remain firm. In the first quarter of this year, China has imported an average of 51.68 million tons (mt) of ore. In 2009, iron ore imports reached a monthly average of 52.37mt, leaving this year’s ore imports just 1% short of 2009 levels, but still very healthy at 14.7mt (40%) more than 2008 levels. With steel prices rising above those of 2009 – Chinese iron ore imports will continue as the prime driver in the dry bulk market.
However, the present spot rates are not expected to stay that low as time charter rates stay strong as illustrated by the reported BHP Billiton booking of a Capesize vessel for 3-5 months at USD/day 37,000 - more than 30% premium to spot. The current FFA (Forward Freight Agreement) rates also point in that direction with Capesize Q2 FFA going up to USD/day 35,750 and Panamax Q2 going down to USD/day 28,500.
Supply:
The active fleet has grown by 3.5% during first quarter of 2010, caused by deliveries of 16 million DWT of newbuildings offset by just 1 million DWT being demolished. Since BIMCO Bulletin 1/2010, the total dry bulk order book has increased by 5.5 million DWT. It seems as though the optimism from surprisingly healthy freight rate levels in 2009 has made contracting go on – despite the fact that the 285 million DWT that comprises the order book today is doomed to make challenging markets in short as well as long-term.
Year-to-date deliveries in capesize amount to 47 ships comprising 8.7 million new DWT, resulting in an increased fleet size of 5% so far in 2010 and active Capesize vessel number 1,000 has just been delivered. At the beginning of 2009, 822 Capesize vessels were active, but an inflow of 112 newbuildings and 29 converted vessels was added to the existing fleet, counterbalanced by just 9 demolitions, leaving a fleet tonnage growth of 18.5% in 2009.
An additional 305 Capesize vessels are scheduled for delivery in 2010, but “only” 183 will hit the water, when applying the BIMCO assumptions for supply forecast as described next to the graphics. In total, this will in turn mean that Capesize tonnage could grow by 21% when fine-tuning for an average scrapping age of 26 years for Capesize vessels
as compared to the average of 30 years for the overall fleet.
BIMCO forecasts inflow of new dry bulk tonnage in 2010 to reach 76 million DWT, offset by demolition of as much as 13 million DWT. This could make the fleet grow by 14% in 2010 as compared to 10% in 2009. Deliveries in 2011 are forecast to be even higher before supply growth comes down in 2012.
Clarkson’s have scheduled deliveries of 120-130 million DWT in 2010. BIMCO assumes that 10% of the entire order book will not be built and one third of the rest will be deferred by one year. Furthermore, the demolition potential is calculated to 49 million DWT, equal to all vessels aged 30 or above to be demolished by the end of 2013.
Outlook:
The fortunes of the dry bulk markets are basically down to the fortunes of China. March was the 13th straight month that the official Chinese PMI (Purchasing Managers Index) has stood above the threshold of 50 that demarcates expansion from contraction, indicating that the Chinese economy is on a stable and relatively fast growth track. PMI rose to 55.1% in March, up 3.1% on last month, according to data released by the China Federation of Logistics & Purchasing.
The housing market and huge infrastructure projects have been primary beneficiaries of the Chinese Government’s stimulus package. With the construction sector being the number one steel user, consuming around 50% of Chinese steel, it goes without saying that a continuance of the strength in this sector is vital for the health of the dry bulk freight rates.
Freight rates are forecast by MSI to drift sideways on current levels over the next 6 months. Capesize rates are forecast to stay around USD 30-35,000 per day while the smaller vessel types could see rates go down from current levels to around USD 16-24,000 per day.
Current news:
BHP Billiton has reached agreement to sell the majority of its iron ore to Asian steel mills on shorter term contracts, ending more than 40 years of annual pricing. Brazilian Vale have also inked new iron ore prices – resulting in price hikes of around 90%– indicating a continued strong demand for the vital raw material in steel production. Contract prices for coking coal are also expected higher.
Meanwhile, the China-Rio Tinto bribery case has just been settled. The court in Shanghai sentenced the four convicted Australian mining giant Rio Tinto employees to prison for a total 39 years. They were found guilty after having admitted to accepting about USD 13 million in bribes from private steel mills that wanted to avoid purchasing iron ore from more costly state-run mills. The arrangement undercut the state’s China Iron and Steel Association’s desire for a united front in negotiating with Australian suppliers. Shortly after the verdict the employees were sacked for clear violation of Chinese Law and Rio Tinto’s code of conduct. China claims its steel sector paid as much at USD 160 million too much last year for iron ore because of bribery and espionage. While the three Chinese defendants have decided to appeal terms, the Australian national Stern Hu appears to be the only one not appealing terms.
Source: Bimco / Hellenic Shipping
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Thursday, 03 November 11
DRY BULK MARKET OFFICIALLY IN THE RED ON LOWER CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept falling yesterday, on lower iron ore demand, which has caused the industry’s benchmark, the BDI (Baltic Dry Index) to ...
Wednesday, 02 November 11
MMTC TO BUY 3.73 MILLION TONS OF COAL FOR 2011- 2013
COALspot.com - India’s state-owned coal and mineral trader MMTC looking for 3.73 million tons of power plant coal for the period 2011 - 2012/ ...
Wednesday, 02 November 11
PANAMAX MARKET BECAME QUIETER AFTER THE RECENT RECOVERY - BRS
There were substantial losses across the board this week: the BDI lost 6.3% to end at 2,018 and the BCI 8.2% to end 3,274. In the smaller sizes the ...
Tuesday, 01 November 11
BORNEO LUMBUNG BUYS 23.8% INTEREST IN BUMI
COALspot.com - PT. Borneo Lumbung Energi (BORN), an Indonesian coking coal producer announces that it has signed a sale and purchase agreement, cond ...
Tuesday, 01 November 11
BAKRIE FORMS STRATEGIC PARTNERSHIP WITH BORNEO - REDUCING DEBT BY USD 1 BILLION
Press Release - Enhancing the standing of “Indonesia Inc.” at the London Stock Exchange PT Bakrie & Brothers Tbk (“BNBR” ...
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- Independent Power Producers Association of India
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- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
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- Videocon Industries ltd - India
- Electricity Authority, New Zealand
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- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- White Energy Company Limited
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
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- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
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- Price Waterhouse Coopers - Russia
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- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
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- IHS Mccloskey Coal Group - USA
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- Wood Mackenzie - Singapore
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- Mjunction Services Limited - India
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- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
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