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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, 06 October 11
REALM SECURES 51% OF KATINGAN RIA COAL PROJECT IN CENTRAL KALIMANTAN
•Realm secures 51% of PT Katingan Ria Thermal Coal Project in Central Kalimantan
•Realm takes ownership of Kalres Limited
•Acquisit ...
Thursday, 06 October 11
SOUTH EAST ASIAS AGGRESSIVE POWER DEMAND GROWTH WILL REQUIRE INVESTMENT OF US$125 BN BY 2020 - WOOD MACKENZIE
COALspot.com - Wood Mackenzie says that South East Asia’s demand growth for new power generation is so aggressive that new power generation in ...
Thursday, 06 October 11
CHINESE DEMAND FOR COAL IMPORTS TO MODERATE IN 2012 - MISWIN MAHESH
COALspot.com - We expect Chinese demand growth for imported steam coal to moderate over the next year. Steam coal imports into China will modera ...
Wednesday, 05 October 11
MINISTRY STICKING TO RAW COMMODITY EXPORT BAN DESPITE INDUSTRY FEARS - JG
The Jakarta Globe, the one of the leading English news paper in Indonesia, reported that, the details of a controversial new regulation that would b ...
Wednesday, 05 October 11
ATLANTIC AND PACIFIC BASINS BECAME TIGHTER FOR PANAMAX LAST WEEK - BRS
A slump for both the Capes and Panamaxes sent the BDI down 1% this week, falling to 1,899 points.
The Capes saw the greatest movement, sliding - ...
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- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Planning Commission, India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
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