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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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Monday, 24 October 11
CAPESIZE RENTAL RATES RISE FOR THIRD DAY AS MORE SHIPS HIRED - HELLENIC SHIPPING
Rates to hire capesize vessels advanced for a third day on signs of increased demand to transport iron ore, used to make steel.Daily rates for the s ...
Sunday, 23 October 11
CHINA LOOKING TO RESELL INDONESIAN COAL CARGOES - BARCLAYS
Commodity Online reported that, Anecdotal evidence has suggested that China is even looking to resell Indonesian cargoes back into the seaborne coal ...
Saturday, 22 October 11
THE SHORT-PERIOD RATES FOR PANAMAX REMAINED FIRM - CAPT. REDDY
COALspot.com - "The market seemed to slow down a bit this week, and all sectors were down by about One to five percent", said Capt. Reddy, ...
Saturday, 22 October 11
WILL THE PROPOSED 26 PERCENT PROFIT SHARING CLAUSE IN THE MINING BILL SPEED UP THE PRODUCTION OR SCARE AWAY INVESTORS? - DIPESH DIPU
A draft law has been approved by a ministerial panel headed by Finance Minister Pranab Mukherjee of India which, if passed by the Cabinet, will make ...
Saturday, 22 October 11
INDONESIA'S GOLDEN ENERGY SLASHES ITS IPO PRICE - THE JAKARTA GLOBE
The Jakarta Globe reported that, Golden Energy Mines, a coal mining company affiliated with Sinar Mas Group, lowered its target in an initial public ...
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- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
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