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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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Friday, 28 October 11
RISING COAL PRICES TO WORSEN CHINA'S WINTER POWER CRUNCH - CRI ENGLISH
CRI English reported that, the rising price of coal is fueling concerns about a power crunch set to plague China this winter, analysts said.
The ...
Thursday, 27 October 11
CAPESIZE REACHING NEW HIGHS - FEARNLEYS
Handy
Pacific market has mixed sentiments with tonnages fixed at firm levels and some tonnages in feast failing on subs.For indo-india, large eco ...
Thursday, 27 October 11
DRY BULK MARKET EDGES DOWN AS CHINAS IRON ORE DEMAND LOSES GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A plunge in Chinese iron ore demand, as a result of high steel inventories and a bleak outlook regarding steel prices, has prompted the dry bulk mar ...
Thursday, 27 October 11
BUKIT ASAM 3Q PROFIT SURGES 66.91%
Insider Stories reported that, the state-controlled coal miner PT Bukit Asam Tbk (PTBA) experienced a 66.91% increase in its net profit during a per ...
Wednesday, 26 October 11
MOODYS SEES MORE GROWTH FOR INDONESIAN COAL MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal mining industry looks set to grow despite an uncertain global economic outlook, according to ...
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- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Australian Coal Association
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- The University of Queensland
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Wilmar Investment Holdings
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