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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, 23 September 11
ICMA TO BUILD UPGRADE FACILITIES TO ANTICIPATE BAN ON LOW-GRADE COAL EXPORT BY 2014
COALspot.com - January to August of this year, Indonesia’s coal production had already reached 235 million tons. Earlier estimates had targete ...
Friday, 23 September 11
UT TO PRODUCE 7 MMT OF COAL BY 2012
PT United Tractors Tbk is targeting a 7 million tons of coal production next year, a 55.55% increase from 4.5 millions targeted this year, said Pres ...
Friday, 23 September 11
RECORD RECYCLING ACTIVITY STIRS OPTIMISM IN DRY BULK SAYS BIMCOS ANALYSIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected at the start of the year, dry bulk ship owners were expected to flock scrapyards around the world, in order to take advantage of attract ...
Friday, 23 September 11
PANAMAX EXPERIENCED A SOFTENING IN RATES - FEARNLEYS AS
Handy
Still a good boost of fresh cargoes entering the market. Vessels in Black Sea with GOA clearance and Baltic positions are fetching tick abov ...
Wednesday, 21 September 11
INDIA'S COAL IMPORTS FROM INDONESIA FALL, CHINA BUYS MORE
COALspot.com - Indian coal imports from Indonesia fall to below 6 million tons in August, and this fall was continuing last few months. Ho ...
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- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Australian Coal Association
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Planning Commission, India
- Medco Energi Mining Internasional
- The University of Queensland
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Economic Council, Georgia
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
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