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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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Wednesday, 19 October 11
ADARO ACQUIRES BUKIT ENIM ENERGI - INSIDER STORIES
Insider Stories reported that, Coal miner PT Adaro Energy Tbk, via its subsidiary dubbed PT Alam Tri Abadi, today revealed a 46% stake takeover of a ...
Tuesday, 18 October 11
INDONESIAN PRESIDENT APPOINTS JERO WACIK AS NEW MINISTER OF ENERGY & MINERAL RESOURCES
COALspot.com - Jero Wacik has been appointed as minister of energy and mineral resources of Indonesia replacing Darwin Saleh and Prof. Widjajono Par ...
Tuesday, 18 October 11
DELTA DUNIA MAKMUR HAS PRODUCED 3.0 MILLION TONS OF COAL LAST MONTH
COALspot.com - PT. Delta Dunia Makmur, wholly owned subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), Delta Dunia Makmur has removed 1.4 million bcm ...
Monday, 17 October 11
KOWEPO TO BUY 260,000 MT BITUMINOUS COAL
COALspot.com - KOWEPO has issued a spot tender for 260,000MT of minimum 5,600kcal/kg NAR Bituminous Coal.
The tender document also mentioned tha ...
Monday, 17 October 11
CAPESIZE SHIPPING COSTS CLIMB TO 10-MONTH HIGH ON ORE IMPORTS
The cost to hire capesize vessels climbed to a 10-month high as rising imports of iron ore to China boosted demand for the ships.Monthly iron-ore sh ...
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- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Australian Coal Association
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Economic Council, Georgia
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Planning Commission, India
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- The University of Queensland
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
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