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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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Saturday, 15 October 11
BUNKER PRICES AND DEMANDS PUSHED FREIGHT RATES UP - VISTAAR
COALspot.com - The market continued to be firm with all segments moving up with biggest gain in Handy size segment up by 15 pct. The BDI was u ...
Saturday, 15 October 11
BENGAL COAL IMPORT TEST - THE TELEGRAPH
The Telegraph reported that, the power position in Bengal improved today but alarm bells are ringing over imported coal stocks that are running out ...
Friday, 14 October 11
CAPE DERIVATIVES MARKET HAS NOT REFLECTED OWNERS EXPECTATIONS' - FEARNBULK
Handy
The Atlantic market continued its upward trend, with fresh cargo entering the market. Skaw Passero to US Gulf climbed US$ 1500 from la ...
Friday, 14 October 11
ADARO BUYS SERVO MEDA FOR RP200 BIO - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) announced that its subsidiary PT Alam Tri Abadi (ATI), acquired 35% stake in PT Serv ...
Thursday, 13 October 11
DRY BULK MARKETS RALLY CONTINUES, BUT ANALYSTS WARN IT WILL BE SHORTLIVED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market continued its push forward yesterday, for yet another session, as the BDI (Baltic Dry Index), the industry’s benchmark edg ...
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- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Planning Commission, India
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
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