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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, 05 October 11
WITH CHINA ON HOLIDAY, DRY BULK MARKET REMAINS STAGNANT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has remained to healthy levels after last month’s rally, but with China going on holiday this week, things are looking sta ...
Tuesday, 04 October 11
INDONESIA RAISES COAL BENCHMARK (HBA) FOR FIRST TIME IN 4 MONTHS
COALspot.com - Indonesia raised the monthly reference price for sales in October by 2.56 percent, the first increase since June.
The Ministry of ...
Tuesday, 04 October 11
COAL MINING GROUP WANTS EXPORT TAX, NOT EXCISE - JG
One of the leading English news paper in Indonesia, The Jakarta Globe reported that, the government shall reimpose a duty on coal exports, classifyi ...
Sunday, 02 October 11
INDIAN COAL IMPORTS PICKED UP - CAPT. REDDY
COALspot.com - The BDI dropped by 1 pct and Cape index dropped by 6 pct closing at 1,899 points and 3,136 points respectively. However all other seg ...
Saturday, 01 October 11
2012 TO BE ANOTHER CHALLENGING YEAR - CEO, REMI MARITIME
Shipowners are facing another challenging year in 2012 said Mr. Leonidas Polemis CEO of Remi Maritime Corporation, urging caution towards operating ...
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- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- The University of Queensland
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
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