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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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Friday, 30 September 11
MINING BILL CLEARED, FIRMS TO SHARE 26% PROFITS WITH LOCALS - NDTV
NDTV reported that, The Union Cabinet cleared the draft mining bill aimed at regulating mining activities Friday. The bill proposes a profit-sharing ...
Friday, 30 September 11
INDIAN IRON ORE MARKET GETTING ACTIVE - FEARNLEYS AS
Handy
The Atlantic market continued its strong trend with fresh cargoes entering the market. Vessels open US Gulf fixed tick above US$ 27k back to t ...
Friday, 30 September 11
KRISHNAPATNAM PORT WINS GLOBAL PORT & COAL PORT OF THE YEAR AWARDS
COALspot.com - Krishnapatnam Port, a dynamic new generation world class port located in the East Coast of India has been adjudged the winner in the ...
Thursday, 29 September 11
INDONESIA'S MINERS FACE AN UNCERTAIN FUTURE - RUPERT WALKER
An evolving regulatory framework for the country's minerals industry could threaten its profitability and stifle investment.
The five-year surge ...
Thursday, 29 September 11
DRY BULK MARKET FALLS MID-WEEK, FURTHER DROP EXPECTED NEXT WEEK ON CHINA HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, as reflected by the Baltic Dry Index (BDI) retreated by 0.36% yesterday reaching 1,920 points, with the Capesize segment suffer ...
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- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
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